It’s been a difficult experience for the crypto market through 2022. By November, the market had dipped by more than 70% from its previous peak at the end of November. Just when the market was looking down, 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 cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Each time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. In the future, as more people are educated about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be created 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 crypto market continues to grow, more and more companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to use and hold cryptocurrency, which will 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 see a recovery in 2023. And for those who are looking to invest for the long-term patience and discipline will be key.