It’s been a rough experience for the crypto market until 2022. In November, the market had dipped by 70 percent from the previous high in November 2021. Just when the market was getting worse after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case can lead to more people getting involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors many investors are looking 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 higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand it. As the awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are starting using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more merchants accept crypto as a form of payment, it makes it easier for people to use and hold crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market will have a rebound by 2023. For those committed to the long run, being patient and disciplined is crucial.