It’s been a difficult ride for the crypto market in 2022. As of November the market had dropped by 70 percent from its previous high at the end of November. When things were going downhill, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than 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 more companies and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people getting involved in the market which could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could increase prices.
slippage in crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for people to buy and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a means of payment, it will make it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long-term patience and discipline is crucial.