It’s been a rough experience for the crypto market in 2022. As of November the market was down by 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. This growing demand can lead to more people being involved in the market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As the awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it 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 increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase, it will become easier for consumers to purchase and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock, 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 consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses accept crypto as a form of payment, it will make it easier for people to utilize and store crypto, which could increase demand and price.
So, will crypto increase in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are committed to the long-term, being patient and disciplined will be key.