It’s been a tough experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were going downhill, the FTX crash turned them worse. 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 bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, 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, the price broke through the resistance, and reached a record high 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 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, which eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. And this growing use case could result in increasing participation in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are starting using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul, being patient and disciplined is crucial.