It’s been a rough ride for the crypto market until 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. Just when the market was getting worse, the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Each time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each 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 prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to increasing participation in the market which could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can increase prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a means of payment, this makes it easier for customers to utilize and store crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long-term patience and discipline is crucial.