It’s been a tough ride for the crypto market in 2022. In November, the market had dipped by more than 70 percent from its previous high in November 2021. When things were looking down and down, the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. 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
Just like we’ve seen previously, dips are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could lead to increasing participation in the market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are 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 increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. As more and more everyday people learn about crypto and how to invest 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, more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this makes it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.