It’s been a difficult experience for the crypto market until 2022. As of November the market was down by 70 percent from its previous high in November 2021. Just when the market was going downhill and down, the FTX crash turned things even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to more people being involved in the crypto market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting 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 lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and understand the concept. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase it will be easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a form of payment, this will make it more convenient for consumers to utilize and store cryptocurrency, which will boost demand and increase 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 could be able to see a rebound in 2023. And for those who are looking to invest for the long haul Being patient and disciplined is essential.