It’s been a rough experience for the crypto market in 2022. In November the market had dropped by 70 percent from its previous high in November 2021. When things were looking down, the FTX crash made them look even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had 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
As we’ve seen in the past, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature 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.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond 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.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive 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 beginning to participate in the market for crypto. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
top social crypto tokens
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to make 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
As the number of ATMs for crypto increase it will be more convenient for individuals to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a form of payment, it will make it easier for consumers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long-term, being patient and disciplined is essential.