It’s been a rough journey for the cryptocurrency market until 2022. As of November the market was down by 70 percent from its previous high in November 2021. Just when the market was going downhill after the FTX crash made them look even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest 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 rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to increasing participation in the market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature, more and more people are starting to learn about and understand the concept. As the awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which can increase prices.
defender of doge crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers begin accepting crypto as a means of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long run Being patient and disciplined is crucial.