It’s been a difficult ride for the crypto market in 2022. In November the market had dropped by more than 70% from its previous peak at the end of November. Just when the market was going downhill and down, the FTX crash turned them even more dire. So, will 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. Every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke the record and hit a record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. Then, 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 previously, dips tend to be followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. And this growing use case can lead to increasing participation in the market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by 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. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. As more and more everyday people become aware of crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to learn about and understand it. As awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase, it will become easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it more convenient for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market will have a rebound by 2023. For those in it for the long run Being patient and disciplined is crucial.