It’s been a tough ride for the crypto market in 2022. In November the market had dropped by 70 percent from its previous high at the end of November. When things were looking down and down, the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto can lead to increasing participation in the market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just 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 could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are starting to learn about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more businesses accept crypto as a form of payment, it will make it easier for people to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long-term Being patient and disciplined is essential.