It’s been a tough experience for the crypto market in 2022. In November the market was down by 70 percent from the previous high in November 2021. Just when the market was getting worse after the FTX crash turned them even more dire. 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 seen its fair share of drops in the past. Each time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown 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 in the past, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and lead to higher 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 could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
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 grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of people learn about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed using blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, this will make it easier for customers to utilize and store cryptocurrency, which will 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 likely that the crypto market could be able to see a rebound in 2023. For those committed to the long run, being patient and disciplined is crucial.