It’s been a difficult experience for the crypto market in 2022. As of November the market was down by 70 percent from the previous high at the end of November. When things were going downhill and down, the FTX crash turned things worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. Each time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, 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. Just like that, we’ve had another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
As the crypto market grows, governments around the world are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to participate in the crypto market. In the future, as more people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can raise prices.
labrador mining crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow it will be more convenient for people to buy and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, it makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long run, being patient and disciplined is essential.