It’s been a tough ride for the crypto market in 2022. In November, the market had dipped by 70% from its previous peak at the end of November. When things were looking down, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to higher prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
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 expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. In the future, as more everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which could raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase, it will become easier for people to buy and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long haul, being patient and disciplined will be key.