It’s been a difficult ride for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash turned things even more dire. The question is, can 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. Each time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest 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 progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and result in higher prices.
Regulations of the government
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 acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement 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 crypto assets will increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. As more and more people become aware of cryptocurrency and investing 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 crypto
As the crypto market is maturing as more and more people are starting to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built using blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to look at crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a means of payment, this will make it easier for people to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long-term patience and discipline will be key.