It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by 70 percent from the previous high at the end of November. And just when things were going downhill and down, the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Each time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen 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
As we’ve seen in the past, dips are typically followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications 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 drive more investment and interest 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 crypto assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. 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
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. As more and more everyday people are educated about crypto and how 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 increasing numbers of people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued 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 accept cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long haul patience and discipline is essential.