It’s been a difficult ride for the crypto market in 2022. In November the market had dropped by 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash turned them even worse. 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. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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 are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to increasing participation in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more people are educated about crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing, more and more people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can increase prices.
asset backed crypto tokens
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in 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 become easier for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses begin accepting crypto as a form of payment, it makes it easier for people to use and hold crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long haul, being patient and disciplined is essential.