It’s been a difficult ride for the crypto market through 2022. As of November the market was down by 70% from its previous peak at the end of November. When things were looking down after the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Each time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries taking to it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could result in more people getting involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Government regulations
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows as more and more people are starting to learn about and understand it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be created upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for consumers to purchase and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a form of payment, this will make it easier for people to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long run patience and discipline is essential.