It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by 70 percent from the previous high in November 2021. When things were getting worse and down, the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown 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, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people being involved in the market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to look at crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. 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 ATMs for crypto continue to increase it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers accept cryptocurrency as a method of payment, this makes it easier for customers to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long run patience and discipline will be key.