It’s been a difficult experience for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high on November 20, 2021. And just when things were getting worse after the FTX crash turned them 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. Every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. In 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could lead to more people getting involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in higher prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography 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 result in more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are beginning to show interest in 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 international payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept cryptocurrency as a method of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long-term, being patient and disciplined will be key.