It’s been a difficult experience for the crypto market until 2022. In November, the market had dipped by more than 70 percent from its previous high at the end of November. Just when the market was getting worse after the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each 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 lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand could result in more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about and understand the concept. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be easier for individuals to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a form of payment, it makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market could have a rebound by 2023. And for those who are committed to the long haul, being patient and disciplined is crucial.