It’s been a tough ride for the crypto market in 2022. In November the market had dropped by more than 70% from its previous peak in November 2021. Just when the market was looking down after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and reached a new peak of $68,000 in the month of November 2021. 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
As we’ve seen in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in increasing participation in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent years 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 for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more people become aware of crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
ios crypto mining
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses accept crypto as a means of payment, it will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, will crypto increase in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re committed to the long-term patience and discipline is crucial.