It’s been a tough experience for the crypto market until 2022. In November the market was down by 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us 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 typically followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many 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 lead to higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning 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 acceptance and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed upon blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to show interest in crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase, it will become easier for people to buy and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, it makes it easier for people to hold and use cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long-term, being patient and disciplined is essential.