It’s been a rough experience for the crypto market in 2022. In November the market was down by 70 percent from its previous high at the end of November. Just when the market was looking down after the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us 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 in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. This growing demand could result in increasing participation in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. With increasing numbers of everyday people are educated about crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which could drive up prices.
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, this makes it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long run Being patient and disciplined is crucial.