It’s been a difficult experience for the crypto market through 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. When things were getting worse and down, the FTX crash turned them even worse. The question is, can 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. Every time, it has bounced back with a big increase.
In 2013, for instance, 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 highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. This growing demand can lead to more people being involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in greater prices.
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Blockchain and cryptocurrency technology is 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 grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to participate in the crypto market. As more and more everyday people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could drive up prices.
crypto arena seating map
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the 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 investment vehicles, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will be able to see a rebound in 2023. For those committed to the long haul patience and discipline is essential.