It’s been a rough experience for the crypto market through 2022. As of November the market was down by 70 percent from its previous high at the end of November. Just when the market was going downhill, the FTX crash turned them worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Each time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous high 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 progressed a lot in recent years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to more people getting involved in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and result in greater prices.
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like gold and crypto. As the global economic situation is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the crypto market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that can raise prices.
cold finance crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long-term, being patient and disciplined is crucial.