It’s been a tough ride for the crypto market through 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were going downhill after the FTX crash made them look worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven 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 are typically followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about and understand it. As awareness and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that can raise prices.
crypto market maker strategy
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses start accepting cryptocurrency as a method of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long haul, being patient and disciplined is crucial.