It’s been a difficult experience for the crypto market in 2022. As of November, the market had dipped by more than 70 percent from the previous high in November 2021. Just when the market was getting worse after the FTX crash made them look worse. 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 experienced its fair share of dips in the past. Each time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. And 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
As we’ve seen in the past, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the market which could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and result in greater prices.
Government regulations
As the crypto market is maturing, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about it and comprehend it. As understanding and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can raise prices.
wealth management crypto
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a means of payment, it will make it more convenient for consumers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long haul Being patient and disciplined is crucial.