It’s been a tough ride for the crypto market in 2022. By November the market was down by more than 70 percent from the previous high at the end of November. When things were getting worse, the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. Every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. In 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
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 taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more 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 early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could raise prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits 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 it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for people to buy and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, this will make it more convenient for people to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market could have a rebound by 2023. And for those who are committed to the long run patience and discipline is crucial.