It’s been a rough experience for the crypto market in 2022. As of November the market had dropped by 70 percent from its previous high on November 20, 2021. And just when things were looking down after the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a prolonged bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could result in more people getting involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and increased 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 starting to invest in the crypto market. With increasing numbers of everyday people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows, it will lead to more people buying and holding crypto, which could raise prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services built 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.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, 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 its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which could increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline will be key.