It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by 70% from its previous peak in November 2021. Just when the market was getting worse and down, the FTX crash turned things more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to more people being involved in the market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
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 and more industries are beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement 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 crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for individuals to purchase and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, this will make it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long haul patience and discipline will be key.