It’s been a tough ride for the crypto market until 2022. In November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were looking down after the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of 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
As we’ve seen in the past, dips are typically followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by 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 is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are starting to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
crypto currency master key
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase, it will become easier for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, it makes it easier for customers to use and hold crypto, which could drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term, being patient and disciplined is essential.