It’s been a rough experience for the crypto market in 2022. By November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse, the FTX crash turned them worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand can lead to more people being involved in the crypto market which could increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and lead to more expensive prices.
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that can raise prices.
hybrid crypto exchange development
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, it will make it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long run Being patient and disciplined will be key.