It’s been a difficult ride for the crypto market through 2022. By November the market had dropped by 70% from its previous peak on November 20, 2021. Just when the market was going downhill after the FTX crash turned them even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. And every time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every 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 lengthy bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in many ways. And this growing use case can lead to more people getting involved in the crypto market and, in turn, increase the price.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the market for crypto and could lead to more expensive prices.
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement 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 like security and scalability, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the crypto market. With increasing numbers of people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this can increase prices.
crypto industry helps write its agenda
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, it makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long run patience and discipline will be key.