It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market was down by 70 percent from its previous high in November 2021. When things were looking down, the FTX crash made them look even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. And every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people become aware of cryptocurrency and investing 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 is maturing increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
crypto key generate rsa general keys modulus 1024
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created using 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 market for crypto continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept 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, or digital assets that signify ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses accept crypto as a form of payment, it will make it more convenient for people to utilize and store crypto, which could increase demand and price.
So, will crypto grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re in it for the long run Being patient and disciplined will be key.