It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were getting worse, the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. And every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown 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 that eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could result in more people getting involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. As more and more people are educated about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a means of payment, it will make it easier for people to hold and use crypto, which could increase demand and price.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re committed to the long run patience and discipline is essential.