It’s been a difficult ride for the crypto market in 2022. As of November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill, 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 seen many dips over the years. Every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. Then, 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 previously, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s 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 businesses and industries taking to the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the crypto market grows, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more everyday people become aware of crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can drive up prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto increase it will be easier for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher prices for crypto.
More adoption by merchants
With the increasing number of merchants accept crypto as a form of payment, this will make it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline is essential.