It’s been a difficult experience for the crypto market until 2022. As of November the market was down by 70 percent from the previous high at the end of November. And just when things were going downhill, the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full 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, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could result in more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of 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 grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals 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.
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers accept crypto as a form of payment, this makes it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will see a recovery in 2023. For those committed to the long haul, being patient and disciplined will be key.