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 at the end of November. When things were looking down and down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. This growing demand could lead to more people getting involved in the crypto market which could increase the price.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in more expensive prices.
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, has a wide 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 could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. As more and more people are educated 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 crypto market continues to mature, more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are beginning to look at crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for people to buy and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses begin accepting cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long haul Being patient and disciplined is crucial.