It’s been a tough journey for the cryptocurrency market in 2022. By November the market was down by 70% from its previous peak at the end of November. When things were going downhill, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Each time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had 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 lengthy bull run, which eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. As more and more people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows it could result in more people purchasing and holding crypto, which could drive up prices.
facebook wants shot in crypto payments
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Utilization of crypto to make cross-border 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 crypto for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase it will be more convenient for consumers to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting cryptocurrency as a method of payment, it will make it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long-term patience and discipline will be key.