It’s been a tough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. And just when things were looking down, the FTX crash made them look worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. And every time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And 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 previously, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people getting involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased 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, also known as individual investors, are also starting to invest in the crypto market. As more and more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and understand it. As awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased 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 to accept crypto as 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.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage 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 its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a means of payment, this will make it easier for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. For those committed to the long haul, being patient and disciplined is essential.