It’s been a difficult experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high in November 2021. When things were looking down after the FTX crash turned things even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017 it broke that record and reached a new highest of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide 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 utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more everyday people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that could raise prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, it will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, will crypto grow in 2023? The only way to know is time. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline will be key.