It’s been a tough experience for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from the previous high in November 2021. When things were looking down, the FTX crash turned things worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. Each time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record 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
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand can lead to more people being involved in the crypto market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase 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 just financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more everyday people become aware of crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, this makes it easier for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run Being patient and disciplined is crucial.