It’s been a difficult experience for the crypto market in 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash turned things worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. And every time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve had 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
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in increasing participation in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people become aware of 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 crypto market continues to mature as more and more people are starting to learn about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, this will make it easier for customers to hold and use crypto, which can increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. For those in it for the long run patience and discipline is crucial.