It’s been a difficult ride for the crypto market in 2022. In November, the market had dipped by more than 70% from its previous peak at the end of November. When things were getting worse after the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back with a huge rise.
For example, 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 that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming, crypto is being used in many ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the crypto market. As more and more everyday people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are beginning to become aware about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a form of payment, this will make it easier for consumers to use and hold crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market could have a rebound by 2023. And for those who are in it for the long-term patience and discipline will be key.