It’s been a difficult ride for the crypto market through 2022. By November, the market had dipped by 70 percent from its previous high on November 20, 2021. 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 many dips over the years. Every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance and reached 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
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could result in more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. 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 continues to mature and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can raise prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created using blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for people to buy and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a form of payment, it makes it easier for people to use and hold crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long haul, being patient and disciplined will be key.