It’s been a rough experience for the crypto market through 2022. As of November the market was down by more than 70% from its previous peak at the end of November. And just when things were going downhill after the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017, it broke that record and hit a record record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
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 growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people being involved in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. As more and more everyday people are educated about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are starting to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use 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.
As the number of ATMs that accept crypto increase it will be more convenient for people to buy and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a form of payment, it will make it more convenient for people to hold and use crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. If you’re committed to the long run Being patient and disciplined will be key.