It’s been a difficult ride for the crypto market in 2022. In November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was getting worse and down, the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Each time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than 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 better companies and industries adopting it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused by 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 is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about and understand it. As awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created upon blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a means of payment. This could result in increased 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 owned by the state as investments, are beginning to look at crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses accept crypto as a means of payment, it makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long haul patience and discipline is crucial.