It’s been a tough ride for the crypto market in 2022. By November the market was down by 70% from its previous peak in November 2021. And just when things were going downhill, the FTX crash made them look even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke that record and reached a new record high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just 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 more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. This growing demand could result in increasing participation in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
bone crypto price
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of 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 crypto ATM’s increase it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more merchants accept cryptocurrency as a method of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market will have a rebound by 2023. For those looking to invest for the long-term Being patient and disciplined is essential.