It’s been a tough experience for the crypto market through 2022. In November the market was down by more than 70 percent from the previous high at the end of November. When things were looking down and down, the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Every time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of crypto grows, it will lead to more people buying and holding crypto, which could increase prices.
ncat crypto price
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers start accepting crypto as a means of payment, this will make it easier for customers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long-term, being patient and disciplined is essential.