It’s been a difficult experience for the crypto market in 2022. By November the market had dropped by 70% from its previous peak in November 2021. Just when the market was going downhill and down, the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. 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
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance 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 crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the adoption rate 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. For example, from supply chain management and voting, many companies are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it this could result in 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 become aware about and understand the concept. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to look at 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 higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a means of payment, it will make it more convenient for consumers to use and hold crypto, which can increase demand and price.
So, will crypto rise in 2023? The only way to know is time. With these things in mind, 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.