It’s been a tough ride for the crypto market through 2022. By November the market was down by more than 70 percent from the previous high in November 2021. Just when the market was going downhill, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. And every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record 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 the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a prolonged bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in 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 taking to the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to look at crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for people to buy and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency 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.
A greater adoption rate by merchants
As more and more businesses begin accepting crypto as a form of payment, this will make it easier for people to utilize and store crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long haul patience and discipline is essential.