It’s been a difficult experience for the crypto market in 2022. By November the market was down by 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and could lead to more expensive prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help 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 that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at 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 advancements continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
crypto community management agency
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services built using blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to explore crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals 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.
With the amount of crypto ATM’s increase, it will become easier for people to buy and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a means of payment, it will make it more convenient for people to utilize and store crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long-term, being patient and disciplined will be key.