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. And just 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 cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to show interest in crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, it makes it easier for people to utilize and store crypto, which can increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long haul Being patient and disciplined will be key.