It’s been a tough experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high at the end of November. When things were looking down after the FTX crash turned things even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Every time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that eventually surpasses the resistance created by the market’s previous 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 recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people getting involved in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
crypto website developer
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants begin accepting crypto as a means of payment, it will make it more convenient for people to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is essential.