It’s been a rough ride for the crypto market in 2022. As of November, the market had dipped by more than 70% from its previous peak on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new 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 following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long 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 in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad 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 make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. With increasing numbers of people learn about crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
bond crypto price
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services built using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to explore crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting cryptocurrency as a method of payment, this makes it easier for people to hold and use crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long haul patience and discipline is essential.