It’s been a tough ride for the crypto market in 2022. In November the market had dropped by 70 percent from the previous high at the end of November. When things were looking down after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. And every time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
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 beginning to investigate the potential for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the crypto market. With increasing numbers of people are educated about crypto and the best ways to invest 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 is maturing as more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could raise prices.
cpan crypto price
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily 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 explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for individuals to purchase and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a form of payment, this will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined will be key.