It’s been a difficult ride for the crypto market in 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was 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 crypto market, especially Bitcoin has experienced many dips in the past. Every time, it has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows 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 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 not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people are educated about 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 market for crypto is maturing, more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can drive up prices.
crypto mining solar power
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for individuals to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a means of payment, this makes it easier for customers to utilize and store crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long-term Being patient and disciplined is crucial.