It’s been a tough experience for the crypto market in 2022. As of November the market had dropped by more than 70% from its previous peak at the end of November. When things were going downhill after the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017, it broke that record and reached a new high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after 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 usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident 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 recent years. With more and more companies and industries adopting it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Crypto and blockchain technology 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 increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people are educated about crypto and the best ways 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 crypto market continues to mature, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which can increase prices.
space crypto coin
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, it will make it easier for customers to use and hold crypto, which can increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long haul, being patient and disciplined is essential.