It’s been a rough experience for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high in November 2021. When things were getting worse and down, the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us 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 long bull run that finally surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to more people getting involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more everyday people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a form of payment, this will make it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is essential.