It’s been a tough ride for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high at the end of November. And just when things were looking down after the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Each time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. 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 previously, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people getting involved in the market which could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. 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 many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more 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 scalability and security, the potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services built upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a method 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 instruments for investing, are now beginning to explore crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, it will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long-term, being patient and disciplined is essential.