It’s been a difficult experience for the crypto market in 2022. By November the market was down by more than 70% from its previous peak at the end of November. When things were getting worse, the FTX crash turned things worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many 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 fell for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. And 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
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
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 embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case can lead to more people being involved in the market which could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and result in higher prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to show interest in crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in 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 continue to grow it will be more convenient for people to buy and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long run, being patient and disciplined will be key.