It’s been a rough ride for the crypto market through 2022. As of November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill, the FTX crash turned them even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Every time, it has bounced back 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. In 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
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 prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also 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 taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as gold and crypto. 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 people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. With increasing numbers of people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows, more and more people are beginning to become aware about and appreciate it. As awareness and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that could raise prices.
flow price crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase, it will become easier for consumers to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a form of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long haul Being patient and disciplined is essential.