It’s been a difficult ride for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was looking down, the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. And every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in many ways. And this growing use case could lead to more people being involved in the market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows 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 purchasing and holding crypto, which could raise prices.
crypto wallet development
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to look at crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals 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
The number of ATMs that accept crypto continue to increase, it will become easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re committed to the long run Being patient and disciplined is crucial.