It’s been a difficult experience for the crypto market through 2022. In November the market was down by more than 70 percent from its previous high at the end of November. When things were looking down, the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. And every time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in 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 even individual investors are also beginning to invest in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services created upon blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to explore 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 increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, this makes it easier for customers to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long haul, being patient and disciplined is essential.