It’s been a tough experience for the crypto market through 2022. By November the market was down by 70% from its previous peak at the end of November. When things were looking down, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. Every time, it’s rebounded with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us 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 in the past, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern 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 recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just 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, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people learn about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about and understand it. As awareness and acceptance grows of crypto it could result in more 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 that allows the provision of financial services built upon blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate is a fast-growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market could have a rebound by 2023. For those committed to the long-term, being patient and disciplined will be key.