It’s been a difficult ride for the crypto market in 2022. By November, the market had dipped by 70 percent from the previous high in November 2021. Just when the market was going downhill and down, the FTX crash turned things more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. And every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand can lead to increasing participation in the market which could drive the prices up.
Increased institutional interest in crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation 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 one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which can increase prices.
insider trading crypto
Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be created using blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are starting to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses begin accepting crypto as a form of payment, it will make it easier for customers to use and hold crypto, which could increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.