It’s been a difficult experience for the crypto market through 2022. In November the market was down by more than 70 percent from its previous high in November 2021. When things were going downhill and down, the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after 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 lengthy bull run that eventually breaks through the resistance created by the previous high price. This is evident 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 adopting it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people getting involved in the market which could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. As more and more people learn about cryptocurrency and investing in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which can raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built upon blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of 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.
The number of crypto ATM’s increase, it will become easier for individuals to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a form of payment, this makes it easier for people to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long run patience and discipline will be key.