It’s been a tough ride for the crypto market in 2022. By November the market was down by 70 percent from its previous high at the end of November. Just when the market was looking down after the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. Every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following 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 usually followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
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 adopting it, its usage and acceptance is rising. From finance to gaming, crypto is being used in many ways. This growing demand could result in increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more 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 causes many investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. In the future, as more people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could raise prices.
nana crypto
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to look at crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for people to buy and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more retailers start accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those committed to the long-term Being patient and disciplined will be key.