It’s been a rough experience for the crypto market in 2022. By November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. And every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke the record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the crypto market which could increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning 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 use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created upon 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.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in 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 boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses accept crypto as a means of payment, this makes it easier for consumers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market could be able to see a rebound in 2023. For those in it for the long-term Being patient and disciplined will be key.