It’s been a tough ride for the crypto market until 2022. As of November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was looking down and down, the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, 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, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to more people being involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop 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 many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of people are educated about 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 is maturing increasing numbers of people are starting to learn about and understand it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
crypto mining phone
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for consumers to purchase and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or 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, this could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses start accepting crypto as a means of payment, this will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long haul Being patient and disciplined will be key.