It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were going downhill and down, the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had 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 before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could raise prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and more expensive 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 means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to show interest in crypto as a potential 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 crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number 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 drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a means of payment, it will make it more convenient for people to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long haul patience and discipline is essential.