It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were looking down and down, the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built using blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and store crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, this will make it more convenient for customers to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long run Being patient and disciplined will be key.