It’s been a difficult experience for the crypto market through 2022. As of November the market had dropped by 70% from its previous peak on November 20, 2021. Just when the market was getting worse, the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. And every time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017 it broke that record and hit a record record high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people getting involved in the market and, in turn, increase the price.
Increased institutional interest in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. In the future, as more people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend it. As awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can drive up prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed using blockchain technology. As DeFi grows 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 market for crypto continues to grow, more and more companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Use of crypto for international payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, it will make it more convenient for customers to hold and use crypto, which can increase demand and price.
So, will crypto grow in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long haul patience and discipline is crucial.