It’s been a rough ride for the crypto market in 2022. By November the market was down by 70 percent from the previous high at the end of November. When things were getting worse, the FTX crash turned them worse. So, will the crypto market be able to recover by 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 example, in 2013, Bitcoin reached a peak of $1,160, then fell 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, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in increasing participation in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. 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 market for crypto is maturing, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for people to buy and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting cryptocurrency as a method of payment, this will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those looking to invest for the long-term Being patient and disciplined is essential.