It’s been a rough experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was getting worse, the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. And every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, drive the prices up.
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 starting to explore the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
crypto portfolio investment
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed upon blockchain technology. As DeFi continues to grow 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 crypto market grows, more and more companies are starting using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are starting to look at crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a means of payment, this makes it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long haul Being patient and disciplined is essential.