It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by more than 70 percent from the previous high at the end of November. When things were getting worse after the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. And every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and hit a record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. In the future, as more people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could drive up prices.
confessions of a crypto millionaire
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of 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 of their assets to digital currencies, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for individuals to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers start accepting crypto as a form of payment, this will make it more convenient for customers to use and hold crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined will be key.