It’s been a tough experience for the crypto market in 2022. By November the market was down by 70 percent from the previous high at the end of November. When things were getting worse, the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Every time, it’s bounced back with a big rise.
For example, 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, it was trading at $3,100. In 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase it will be easier for people to buy and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting cryptocurrency as a method of payment, it makes it easier for customers to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long run patience and discipline is crucial.