It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market had dropped by 70% from its previous peak on November 20, 2021. When things were getting worse after the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. And every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
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 embracing the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people being involved in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. In the future, as more people are educated about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created upon blockchain technology. As DeFi expands 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 increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto 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, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be more convenient for people to buy and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, this makes it easier for customers to utilize and store crypto, which could increase demand and price.
So, will crypto grow in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long-term, being patient and disciplined will be key.