It’s been a difficult ride for the crypto market in 2022. As of November, the market had dipped by more than 70% from its previous peak at the end of November. When things were looking down after the FTX crash turned things even worse. So, will 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. And every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through the resistance and reached a new highest 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
Just like we’ve seen before, fall-offs are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning 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 greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of people are educated about crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can increase prices.
seesaw crypto presale
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built using blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase it will be easier for people to buy and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a form of payment, it will make it easier for consumers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long run, being patient and disciplined is crucial.