It’s been a difficult ride for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high at the end of November. When things were getting worse after the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. And this growing use case could lead to more people getting involved in the market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and lead to higher prices.
Regulations from 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 crypto. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems 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 at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use 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 that accept crypto continue to increase it will be more convenient for people to buy and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting cryptocurrency as a method of payment, it will make it more convenient for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re committed to the long haul patience and discipline is essential.