It’s been a tough ride for the crypto market in 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. And just when things were looking down and down, the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs 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 more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in many ways. And this growing use case could lead to more people getting involved in the market which could increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications 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. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are starting to learn about it and comprehend it. As awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which could raise prices.
ibm crypto card
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the 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 could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long-term patience and discipline is essential.