It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. And just when things were looking down and down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. Every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people being involved in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and could lead to higher 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 regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that can raise prices.
avira in adding crypto to products
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are now beginning to explore crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, it will make it more convenient for customers to use and hold crypto, which can increase demand and price.
So, will crypto grow in 2023? Only time will tell. With these things being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long-term Being patient and disciplined is crucial.