It’s been a rough ride for the crypto market in 2022. By November, the market had dipped by 70% from its previous peak at the end of November. When things were getting worse after the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record highest of $68,000 in 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 tend to be followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. This growing demand can lead to more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto grows, governments around the world are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and understand it. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase, it will become easier for people to buy and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, it will make it easier for customers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined will be key.