It’s been a tough journey for the cryptocurrency market until 2022. In November the market was down by 70% from its previous peak on November 20, 2021. Just when the market was looking down and down, the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Each time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, 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. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run, which eventually surpasses 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 made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in increasing participation in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain it could result in 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 crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. As more and more everyday people become aware of 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 crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created using blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase, it will become easier for consumers to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers accept crypto as a form of payment, this will make it easier for people to utilize and store crypto, which can increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long-term patience and discipline is essential.