It’s been a rough ride for the crypto market in 2022. By November, the market had dipped by more than 70 percent from its previous high at the end of November. And just when things were looking down after the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Each time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad 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 cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Regulations of the government
As the crypto market grows, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. As more and more everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be more convenient for individuals to purchase and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, it will make it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined will be key.