It’s been a difficult experience for the crypto market through 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were looking down after the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are starting to create 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 underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
crypto mining logo
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants start accepting crypto as a form of payment, this will make it more convenient for people to use and hold 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 in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. For those committed to the long-term, being patient and disciplined is essential.