It’s been a tough experience for the crypto market until 2022. As of November the market was down by more than 70 percent from the previous high at the end of November. Just when the market was getting worse after the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and understand the concept. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for consumers to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, it makes it easier for customers 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 possible that the crypto market will see a recovery in 2023. For those committed to the long run, being patient and disciplined is crucial.