It’s been a difficult ride for the crypto market through 2022. In November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. Every time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017, it broke the record and hit a record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. 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
Just like we’ve seen in the past, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in increasing participation 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 witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, 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 benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which could raise prices.
crypto venture capital funds
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a form of payment. This could result in 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 instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for people to buy and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market will have a rebound by 2023. And for those who are committed to the long haul, being patient and disciplined is crucial.