It’s been a rough experience for the crypto market through 2022. By November the market was down by 70 percent from its previous high in November 2021. Just when the market was getting worse, the FTX crash made them look more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market which could drive the prices up.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will increase. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like gold and crypto. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. As more and more people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this could drive up prices.
rock game crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to an increase in the 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 government-owned investments, are 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 increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more businesses begin accepting crypto as a means of payment, this will make it easier for people to utilize and store crypto, which can increase demand and price.
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 have a rebound by 2023. If you’re committed to the long-term Being patient and disciplined is essential.