It’s been a difficult ride for the crypto market in 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017, it broke the record, and hit a new high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to increasing participation in the crypto market which could increase the price.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to explore crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could increase demand and higher prices.
Utilization of crypto to make 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 are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase, it will become easier for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate 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 consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers accept cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store 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 possible that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.