It’s been a tough experience for the crypto market through 2022. By November the market had dropped by more than 70% from its previous peak at the end of November. Just when the market was going downhill and down, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had 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
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than 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 better companies and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand could result in more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. 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
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more everyday people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this can increase prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are beginning to show interest in crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals 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 that accept crypto continue to increase, it will become easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, it makes it easier for people to use and hold crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long-term, being patient and disciplined is crucial.