It’s been a difficult ride for the crypto market in 2022. In November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was going downhill, the FTX crash turned them more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. And every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. This growing demand can lead to increasing participation in the market which could increase the price.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its capability to perform 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 demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, this makes it easier for people to utilize and store crypto, which can 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 have a rebound by 2023. And for those who are in it for the long-term Being patient and disciplined is essential.