It’s been a difficult ride for the crypto market through 2022. In November, the market had dipped by more than 70 percent from the previous high at the end of November. And just when things were getting worse after the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows 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 prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case could lead to more people being involved in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. As more and more people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will see a recovery in 2023. If you’re committed to the long-term patience and discipline is crucial.