It’s been a difficult experience for the crypto market through 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. And just when things were looking down after the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Each time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. 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 in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind 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 could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more everyday people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are beginning to become aware about it and comprehend it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
crypto heaven
Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be built using blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting 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
Sovereign wealth funds, which are state-owned investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it 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 merchants accept crypto as a form of payment, it will make it more convenient for customers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long haul patience and discipline will be key.