It’s been a rough ride for the crypto market until 2022. By November the market had dropped by 70 percent from the previous high in November 2021. And just when things were getting worse after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Every time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high 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 recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming 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, which in turn could boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential 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 of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows, more and more people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which can increase prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use 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 regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and higher prices for crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, it will make it more convenient for consumers to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined is essential.