It’s been a difficult ride for the crypto market until 2022. By November the market had dropped by 70% from its previous peak at the end of November. And just when things were going downhill, the FTX crash turned things more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke the record and reached a new highest of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
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 growing. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in increasing participation in the market which could boost prices.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are starting to look 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 increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these 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 payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a means of payment, it will make it easier for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long-term patience and discipline is essential.