It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was getting worse and down, the FTX crash made them look worse. So, will 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 dips in the past. And every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in higher prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and more expensive 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 increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for people to buy and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a form of payment, this makes it easier for customers to use and hold crypto, which could drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long haul Being patient and disciplined will be key.