It’s been a rough experience for the crypto market in 2022. By November the market was down by 70% from its previous peak in November 2021. Just when the market was getting worse after the FTX crash turned them even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. And every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown 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 tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto could lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more 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 grows, more and more people are beginning to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this could drive up prices.
xla crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned investments, are starting to look at crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of retailers accept crypto as a form of payment, this makes it easier for people to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long haul, being patient and disciplined is crucial.