It’s been a rough ride for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from its previous high at the end of November. When things were getting worse, the FTX crash turned things worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Each time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, 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 record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
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 can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand can lead to more people being involved in the crypto market and, in turn, increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows it could result in more people buying as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
In the event that more merchants start accepting crypto as a means of payment, this will make it easier for customers to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long run Being patient and disciplined is essential.