It’s been a rough ride for the crypto market through 2022. In November the market was down by more than 70 percent from its previous high in November 2021. And just when things were looking down after the FTX crash turned them even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. This growing demand can lead to more people being involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more everyday people are educated about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
alto crypto price
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits 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, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase it will be easier for people to buy and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more merchants begin accepting crypto as a form of payment, this makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term patience and discipline is crucial.