It’s been a rough ride for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. When things were looking down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. And every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries taking to it, its usage and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. In the future, as more everyday people are educated about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which could increase prices.
air quality crypto miner
Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for people to buy and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long-term patience and discipline will be key.