It’s been a difficult ride for the crypto market in 2022. By November, the market had dipped by 70% from its previous peak at the end of November. When things were getting worse, the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Each time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, 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 record highest of $68,000 in November 2021. Then, 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 long bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations of 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 increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. As more and more everyday people become aware of crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase it will be more convenient for consumers to purchase and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses accept crypto as a form of payment, it makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long run, being patient and disciplined is crucial.