It’s been a tough ride for the crypto market through 2022. By November, the market had dipped by more than 70 percent from the previous high in November 2021. And just when things were looking down, the FTX crash made them look even more dire. So, will 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. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually 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 in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. This growing demand could result in more people being involved in the crypto market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people learn about cryptocurrency and investing in it This could result in 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 the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could increase prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the capability to perform fast and cheap 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.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase it will be easier for consumers to purchase and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a means of payment, this will make it more convenient for people to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long run, being patient and disciplined is crucial.