It’s been a rough experience for the crypto market in 2022. As of November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down after the FTX crash made them look even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Each time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen 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 tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the market which could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people learn about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to look at crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses begin accepting crypto as a form of payment, this makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long haul patience and discipline will be key.