It’s been a difficult ride for the crypto market in 2022. As of November, the market had dipped by more than 70 percent from its previous high at the end of November. When things were getting worse, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Every time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. 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 are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about and understand the concept. As understanding and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which can drive up prices.
delta financial crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a means 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
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to show interest in cryptocurrency as a possible 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.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline is essential.