It’s been a rough ride for the crypto market in 2022. In November, the market had dipped by more than 70 percent from the previous high at the end of November. When things were getting worse and down, the FTX crash made them look worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. And every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And 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 seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in not just 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 adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
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 crypto assets will expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
crypto banking alliance
Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it 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 quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a means of payment, it makes it easier for consumers to utilize and store crypto, which could increase demand and price.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long run, being patient and disciplined is crucial.