It’s been a rough ride for the crypto market through 2022. By November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. And every time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. And this growing use case can lead to more people being involved in the market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people purchasing and holding crypto, which could raise prices.
crypto backup wallet
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created using blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a form of payment, this makes it easier for consumers to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined will be key.