Averaging Down Crypto

It’s been a difficult ride for the crypto market through 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash made them look even worse. So, will the crypto market recover in 2023?

Crypto Market Dips are Cyclical

The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back by a massive rise.

For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.

Every Dip is Followed by a Long Bull Run

Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in 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 taking to it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to increasing participation in the crypto market which could boost prices.

The rise in interest of institutions in crypto

In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and result in greater prices.

Regulations from the Government

As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.

Blockchain has many more applications.

The underlying technology behind the majority of cryptocurrencies, blockchain has a wide 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 could stimulate more investment and excitement in crypto.

Technology advancements

Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.

Rising global economic uncertainty

In the current instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and higher prices.

Retail investors are able to earn interest

Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. In the future, as more everyday people learn about crypto and the best ways 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 market for crypto continues to mature, more and more people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which could increase prices.

averaging down crypto

Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.

The development of crypto payment methods

As the crypto market grows increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.

Increased investment from sovereign wealth funds

The sovereign wealth fund, also known as owned by the state as investments, are beginning to explore crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.

Utilization of crypto to make payment across borders

One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.

An increasing number of crypto ATM’s

As the number of ATMs that accept crypto continue to increase, it will become easier for people to buy and keep crypto, which will boost demand and increase prices.

Development of security tokens

Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher prices for crypto.

Merchants are more likely to adopt the concept.

With the increasing number of retailers accept cryptocurrency as a method of payment, this will make it easier for people to use and hold crypto, which could increase demand and price.

So, will crypto increase in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long-term patience and discipline is essential.