It’s been a rough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70 percent from the previous high in November 2021. Just when the market was getting worse and down, the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. And every time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Then, 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
As we’ve seen in the past, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can drive up prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to look at crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more merchants begin accepting crypto as a form of payment, it makes it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could see a recovery in 2023. For those in it for the long haul, being patient and disciplined is crucial.