It’s been a difficult experience for the crypto market until 2022. By November the market was down by 70 percent from the previous high at the end of November. Just when the market was looking down after the FTX crash turned things even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in 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 better companies and industries embracing it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning 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 adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. With increasing numbers of people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
compound crypto interest
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be easier for people to buy and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a means of payment, this makes it easier for people to hold and use crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market will see a recovery in 2023. For those in it for the long haul patience and discipline is crucial.