It’s been a difficult ride for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. 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 had many dips in the past. And every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s 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 come a long way in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people are educated about 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 crypto
As the crypto market is maturing as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can raise prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants accept crypto as a means of payment, it will make it more convenient for consumers to use and hold crypto, which can increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long-term, being patient and disciplined will be key.