It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high in November 2021. When things were going downhill, the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. And every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had 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 that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more people learn about cryptocurrency and investing 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 is maturing, more and more people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows finance services created on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept cryptocurrency as a method of payment, it will make it easier for people to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. For those in it for the long-term, being patient and disciplined is essential.