It’s been a tough ride for the crypto market through 2022. In November the market had dropped by 70 percent from the previous high at the end of November. When things were looking down after the FTX crash turned them worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market grows, governments around 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 technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation 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 one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. As more and more people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and understand it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
stacks stx crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to explore crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize 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 for crypto increase it will be easier for consumers to purchase and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more businesses accept crypto as a form of payment, it makes it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow 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. If you’re looking to invest for the long haul patience and discipline is essential.