It’s been a tough experience for the crypto market in 2022. In November, the market had dipped by 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Each time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every 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 that finally surpasses the resistance created by the previous market’s 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 progressed a lot 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. This growing demand could lead to more people being involved in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years, 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 potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and result in higher prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
crypto mobile wallet app development
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase, it will become easier for people to buy and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a means of payment, it makes it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. For those in it for the long-term, being patient and disciplined is essential.