It’s been a rough experience for the crypto market through 2022. In November the market was down by 70 percent from its previous high at the end of November. When things were going downhill after the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017 it broke that record and hit a record highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also in 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 more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
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 assets such as bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
move crypto from robinhood
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to explore crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase it will be more convenient for individuals to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long haul patience and discipline is essential.