It’s been a difficult journey for the cryptocurrency market through 2022. In November the market had dropped by more than 70 percent from its previous high on November 20, 2021. And just when things were going downhill, the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Each time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. 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 the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people getting involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the crypto market is maturing, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it, this could lead to 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 continues to mature as more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could increase prices.
how to transfer crypto wallet to fiat wallet
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, it will make it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long run patience and discipline is crucial.