It’s been a difficult ride for the crypto market through 2022. In November the market was down by 70% from its previous peak on November 20, 2021. And just when things were looking down and down, the FTX crash turned them worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017 it broke that record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a prolonged bull run that 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
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen 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. This increased interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could 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 built upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are government-owned investments, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be easier for people to buy and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, this will make it easier for customers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market will see a recovery in 2023. For those in it for the long-term, being patient and disciplined is crucial.