It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill after the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. And every time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom 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. And in 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that following each 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 long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors 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 can bring stability to the crypto market and lead to higher prices.
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as 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 lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase, it will become easier for individuals to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a means of payment, it will make it easier for people to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. For those in it for the long run Being patient and disciplined will be key.