It’s been a rough experience for the crypto market in 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were looking down and down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. And every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven 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 long bull run that finally overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also 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 it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could result in increasing participation in the market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that can increase prices.
crypto firms launch coalition
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to explore crypto as an asset class. As more funds allocate a portion 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 main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, this makes it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. And for those who are in it for the long haul, being patient and disciplined will be key.