It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was going downhill, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. And every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, 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. Then, just like that we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and result in greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of 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 stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be more convenient for individuals to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership in 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 consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting crypto as a form of payment, this will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term, being patient and disciplined is crucial.