It’s been a rough experience for the crypto market through 2022. In November, the market had dipped by more than 70% from its previous peak on November 20, 2021. And just when things were going downhill, the FTX crash turned them more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in more people getting involved in the market and, in turn, 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 hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could raise prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be easier for people to buy and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a form of payment, it will make it more convenient for customers to use and hold crypto, which could increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long run patience and discipline will be key.