It’s been a tough ride for the crypto market in 2022. As of November the market had dropped by 70% from its previous peak in November 2021. And just when things were going downhill and down, 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 market for crypto, particularly Bitcoin, has seen many dips over the years. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. In 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the crypto market. As more and more people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
crypto candle chart
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are beginning to show interest in crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers accept crypto as a means of payment, this makes it easier for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long-term, being patient and disciplined will be key.