It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from its previous high at the end of November. Just when the market was going downhill and down, the FTX crash turned them more dire. What is the likelihood that 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 rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people being involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement 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 scalability and security, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase it will be easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, it will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market will be able to see a rebound in 2023. For those in it for the long run patience and discipline is crucial.