It’s been a rough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. Just when the market was going downhill after the FTX crash turned them more dire. 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 dips over the years. Every time, it’s bounced back with a big 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 that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
defi land crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses accept cryptocurrency as a method of payment, this makes it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market could be able to see a rebound in 2023. For those in it for the long run patience and discipline will be key.