It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. Just when the market was getting worse after the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it’s rebounded with a big rise.
For instance, 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 high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows 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 tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high 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 come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could drive up prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s increase, it will become easier for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a means of payment, this makes it easier for customers to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long-term patience and discipline is crucial.