It’s been a tough ride for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was getting worse, the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. Each time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom 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 reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and result in greater prices.
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. 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 crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which could increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. With these things to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long run patience and discipline is essential.