It’s been a difficult ride for the crypto market until 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down, the FTX crash turned things even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017, it broke the record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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 before, fall-offs are typically followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. And this growing use case could result in more people being involved in the market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people become aware of crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is the capability to perform 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 demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase it will be easier for consumers to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a means of payment, this will make it more convenient for customers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market will see a recovery in 2023. For those in it for the long haul patience and discipline is crucial.