It’s been a rough experience for the crypto market in 2022. By November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were looking down, the FTX crash turned them more dire. 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 had its fair share of drops in the past. Each time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance 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 crypto market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and lead to higher prices.
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like 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
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people learn 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, more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase it will be easier for people to buy and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a form of payment, this will make it more convenient for consumers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long-term, being patient and disciplined is crucial.