It’s been a rough ride for the crypto market in 2022. As of November the market had dropped by more than 70 percent from its previous high on November 20, 2021. And just when things were going downhill and down, the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke the record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. This growing demand can lead to more people being involved in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation remains 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 crypto. Retail investors, or individual investors are also beginning to participate in the crypto market. As more and more everyday people become aware of cryptocurrency and investing 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 market for crypto grows, more and more people are beginning to learn about and understand the concept. As awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to show interest in crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase, it will become easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses accept crypto as a means of payment, this will make it easier for customers to use and hold crypto, which could increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will have a rebound by 2023. And for those who are committed to the long-term patience and discipline will be key.