It’s been a difficult experience for the crypto market through 2022. In November, the market had dipped by more than 70 percent from its previous high at the end of November. And just when things were looking down and down, the FTX crash turned things even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted 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. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could lead to more people getting involved in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like gold and crypto. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned investments, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase, it will become easier for people to buy and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a means of payment, this makes it easier for people to use and hold crypto, which can increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long haul patience and discipline is crucial.