It’s been a tough ride for the crypto market through 2022. By November the market had dropped by 70% from its previous peak in November 2021. Just when the market was looking down and down, 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 had many dips over the years. And every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell 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, it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to increasing participation in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology, which 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 security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows, more and more people are starting to learn about it and comprehend it. As understanding and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can increase prices.
raspberry pi cluster crypto mining
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned investments, are beginning to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, it will make it easier for customers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market could have a rebound by 2023. For those committed to the long haul patience and discipline will be key.