It’s been a rough ride for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. When things were getting worse 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 crypto market, especially Bitcoin has experienced its fair share of drops in the past. And every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck 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. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people getting involved in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and result in higher prices.
Government regulations
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is 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 expand. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. In the future, as more people become aware of 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 increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
accel defi crypto price
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher 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 result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase, it will become easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting crypto as a means of payment, it will make it more convenient for customers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined is crucial.