It’s been a difficult journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70 percent from its previous high in November 2021. When things were getting worse, the FTX crash turned them worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, 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. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and could lead to higher 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 and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are starting to learn about it and comprehend it. As understanding and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that could increase prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting cryptocurrency as a method of payment, it makes it easier for people to hold and use cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market could have a rebound by 2023. For those in it for the long run patience and discipline is crucial.