It’s been a tough ride for the crypto market in 2022. In November the market was down by 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash turned things more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. And every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest 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 recent years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could result in more people getting involved in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and understand it. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows 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 higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as 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
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency 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 for crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses accept crypto as a form of payment, it will make it more convenient for people to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long-term, being patient and disciplined will be key.