It’s been a difficult ride for the crypto market through 2022. As of November the market was down by 70 percent from the previous high at the end of November. Just when the market was looking down after the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Each time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record high of $68,000 in November 2021. Then, 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
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy 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
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are starting to create 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 applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. As more and more people are educated about crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about it and comprehend it. As understanding and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this could raise 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 upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, it will make it more convenient for people to utilize and store crypto, which can increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. With these things being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline will be key.