It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market had dropped by 70 percent from the previous high at the end of November. When things were looking down and down, the FTX crash made them look worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Each time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven 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 previously, dips are usually followed by a long bull run, which eventually surpasses 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 and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could lead to increasing participation in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in greater prices.
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety 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 will increase investment and enthusiasm in cryptocurrency.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday 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 crypto market continues to mature increasing numbers of people are starting to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are state-owned investments, are beginning to explore crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto 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.
The number of crypto ATM’s continue to increase it will be more convenient for people to buy and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, it will make it more convenient for consumers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market could have a rebound by 2023. And for those who are looking to invest for the long run patience and discipline is crucial.