It’s been a difficult experience for the crypto market until 2022. In November the market was down by 70 percent from the previous high in November 2021. When things were getting worse, the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Each time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, 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 highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad 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 utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which could raise prices.
biometric crypto wallet
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a form of payment. This could lead to 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 beginning to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul patience and discipline is essential.