It’s been a tough experience for the crypto market until 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. When things were looking down and down, the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Every 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, reaching a low of $150. In 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each 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 tend to be followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also 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 better companies and industries taking to it, its usage and acceptance is rising. From finance to gaming, crypto is being used in many ways. And this growing use case can lead to more people getting involved 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 potential in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a form 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 beginning to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this makes it easier for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re committed to the long run patience and discipline is essential.