It’s been a tough experience for the crypto market through 2022. As of November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just 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 crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. As more and more people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows, more and more people are starting to learn about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this could raise prices.
crypto miners approval energize new grid
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and higher 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 form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a form of payment, it makes it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long haul, being patient and disciplined will be key.