It’s been a tough experience for the crypto market until 2022. In November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was looking down and down, 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 seen its fair share of dips over the years. Each time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this could raise prices.
crypto use more prevalent imf finds
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting using crypto to be a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
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 start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this will make it more convenient for customers to hold and use crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. With these things in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long run patience and discipline is crucial.