It’s been a tough experience for the crypto market in 2022. By November the market was down by 70% from its previous peak 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 market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it has bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the market, which in turn could increase the price.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications 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. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. As more and more people learn about crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
crypto exchanges that allow shorting
Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services created using blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a form 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
These funds are owned by the state as investments, are starting to show interest in 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.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow it will be more convenient for people to buy and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting crypto as a means of payment, this will make it more convenient for consumers to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market will have a rebound by 2023. For those looking to invest for the long run Being patient and disciplined will be key.