It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by 70 percent from the previous high at the end of November. When things were getting worse after the FTX crash turned things more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As 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 can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case could result in increasing participation in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could increase prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting crypto as a form of payment, this will make it more convenient for consumers to utilize and store crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long-term patience and discipline is crucial.