It’s been a difficult ride for the crypto market in 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse after the FTX crash turned them 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 experienced its fair share of drops in the past. Each time, it’s rebounded by a massive rally.
For example, in 2013, 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 hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in 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 better companies and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to look at crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers accept crypto as a form of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long haul, being patient and disciplined is essential.