It’s been a difficult ride for the crypto market through 2022. In November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increased interest of institutions can bring stability to the market for crypto and lead to higher prices.
Government regulations
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven investments like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the market for crypto. In the future, as more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about it and comprehend it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services built using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency 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.
As the number of ATMs that accept crypto continue to grow it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a form of payment, it will make it more convenient for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. For those committed to the long run Being patient and disciplined will be key.