It’s been a difficult ride for the crypto market in 2022. In November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. When things were getting worse and down, the FTX crash turned them even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced 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 over a year before hitting a low of $150. In 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than 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 businesses and industries taking to it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand can lead to more people being involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
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 crypto assets will continue to expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more merchants begin accepting cryptocurrency as a method of payment, this will make it more convenient for people to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long run patience and discipline will be key.