It’s been a rough experience for the crypto market in 2022. By November the market was down by 70 percent from the previous high in November 2021. And just when things were going downhill and down, 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 seen its fair share of drops in the past. And every time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017 it broke that record and hit a record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run that finally overcomes the resistance set 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
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, increase the price.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
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 result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people are educated about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that could drive up prices.
form token crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms 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 as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a means of payment, it will make it easier for people to hold and use crypto, which can drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those committed to the long haul, being patient and disciplined is crucial.