It’s been a rough ride for the crypto market until 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were getting worse and down, the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. And every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. In 2018, the price was at $3,100. And in 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can increase prices.
equity trust crypto
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
As more and more retailers begin accepting crypto as a form of payment, this will make it easier for consumers to utilize and store crypto, which could increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long haul patience and discipline is essential.