It’s been a rough experience for the crypto market in 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were looking down after the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. And every time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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 that finally overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. This growing demand could lead to more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look 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 increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. As more and more everyday people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate it. As understanding and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that can raise prices.
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto 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 owned by the state as investments, are beginning to look at crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a means of payment, it makes it easier for customers to utilize and store crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those committed to the long run patience and discipline will be key.