It’s been a tough ride for the crypto market through 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. When things were looking down after the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Each time, it has bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke that resistance and hit a new high 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
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could result in increasing participation in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses accept crypto as a means of payment, it makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long run, being patient and disciplined is essential.