It’s been a tough ride for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was looking down, the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. And every time, it’s rebounded with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had 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 before, fall-offs tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could lead to increasing participation in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology 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 grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. As more and more everyday people learn about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for people to buy and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset such as stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, this will make it more convenient for consumers to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those committed to the long-term, being patient and disciplined is crucial.