It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. When things were looking down and down, the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Each time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. 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
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could result in increasing participation in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Blockchain technology and cryptography are at the very beginning of development. As progress is 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.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
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 get involved in the crypto market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are beginning to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for people to buy and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it makes it easier for consumers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul, being patient and disciplined is essential.