It’s been a difficult experience for the crypto market through 2022. By November the market was down by 70% from its previous peak in November 2021. Just when the market was going downhill and down, the FTX crash turned things even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. Every time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom 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. In 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. 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
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to become aware about and understand it. As awareness and acceptance of crypto grows it could result in more people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created using blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses accept crypto as a form of payment, this will make it easier for customers to use and hold crypto, which can boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run Being patient and disciplined is essential.