It’s been a rough ride for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. And just when things were looking down, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Blockchain technology and cryptography are 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 expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and higher 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 method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to look at crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, will crypto increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term Being patient and disciplined is essential.