It’s been a rough experience for the crypto market through 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were looking down after the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Each time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017, it broke the record and hit a record high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people being involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a method 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
These funds are state-owned investment vehicles, are now beginning to explore crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for people to buy and keep crypto, which could 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 real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a means of payment, it will make it more convenient for consumers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline will be key.