It’s been a rough ride for the crypto market in 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned them 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. Every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long 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
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. And this growing use case can lead to increasing participation in the market which could boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and result in higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
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 crypto assets will continue to grow. This could lead to more use and increase in 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 increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for people to buy and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it more convenient for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. For those in it for the long haul patience and discipline is essential.