It’s been a difficult experience for the crypto market in 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. When things were looking down, the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. And every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
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 the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to participate in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and 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 of crypto grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept crypto as a form of payment, this will make it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long-term patience and discipline is crucial.