It’s been a difficult experience for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. And just when things were getting worse after the FTX crash turned things 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 experienced its fair share of dips in the past. Each time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. 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 before, fall-offs are usually followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline is essential.