It’s been a difficult experience for the crypto market until 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were getting worse and down, the FTX crash turned things even worse. 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 dips over the years. Every time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every 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 lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the market, which in turn could increase the price.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. With increasing numbers of people become aware of crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to learn about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this can increase 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 using blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants accept crypto as a form of payment, it will make it more convenient for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul, being patient and disciplined is crucial.