It’s been a difficult journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from its previous high on November 20, 2021. Just when the market was looking down, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. Each time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record high of $19,600. Then, in 2018, 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. Then, just like that we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that could increase prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a means of payment, it makes it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long haul, being patient and disciplined is essential.