It’s been a difficult experience for the crypto market through 2022. In November, the market had dipped by 70% from its previous peak at the end of November. When things were looking down after the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Every time, it’s rebounded by a massive increase.
For instance, 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 that record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people being involved in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities of crypto assets. 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 continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest 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 cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and appreciate it. As understanding and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
bico crypto market cap
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, this could increase demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could have a rebound by 2023. And for those who are in it for the long haul patience and discipline will be key.