It’s been a difficult ride for the crypto market in 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. When things were getting worse and down, the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. And every time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could result in increasing participation in the market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the crypto market. With increasing numbers of people are educated about crypto and how to invest 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 crypto market continues to mature as more and more people are beginning to learn about and understand the concept. As the awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could drive up prices.
crypto passive income
Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to look at crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase, it will become easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a form of payment, it makes it easier for consumers to hold and use crypto, which can drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long run, being patient and disciplined will be key.