It’s been a tough experience for the crypto market through 2022. As of November, the market had dipped by 70 percent from its previous high on November 20, 2021. When things were looking down, the FTX crash turned them even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. In 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to explore crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers accept crypto as a form of payment, it will make it more convenient for people to hold and use crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. With these things being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long run, being patient and disciplined is essential.