It’s been a tough experience for the crypto market through 2022. By November the market had dropped by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it’s rebounded with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as gold and crypto. Since the economic outlook for the world remains 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 ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers accept cryptocurrency as a method of payment, it makes it easier for people to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long haul patience and discipline is crucial.