It’s been a rough ride for the crypto market through 2022. As of November the market had dropped by 70% from its previous peak in November 2021. Just when the market was getting worse and down, the FTX crash turned things more dire. What is the likelihood that 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. And every time, it’s bounced back with a huge 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 new record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could lead to increasing participation in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and result in greater prices.
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and the best ways to invest 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 crypto market grows as more and more people are beginning to become aware about and appreciate it. As understanding and acceptance grows of crypto it could result in more people buying and holding crypto, which could increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services built using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to make 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 prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and keep 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 real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a means of payment, it will make it more convenient for consumers to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long run, being patient and disciplined is essential.