It’s been a difficult experience for the crypto market through 2022. In November the market had dropped by 70% from its previous peak on November 20, 2021. And just when things were going downhill, the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Government regulations
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this will make it easier for consumers to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. With these things 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 run, being patient and disciplined will be key.