It’s been a rough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from the previous high in November 2021. And just when things were going downhill, the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Each time, it’s rebounded with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people getting involved in the market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about 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 crypto market grows increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this can increase prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to look at crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a form of payment, it will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long haul, being patient and disciplined will be key.