It’s been a difficult ride for the crypto market until 2022. By November the market was down by more than 70% from its previous peak in November 2021. When things were getting worse after the FTX crash made them look worse. 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 had its fair share of dips over the years. Every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations of 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 could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are 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 grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing, more and more people are beginning to become aware 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 can increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its 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 the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses start accepting crypto as a means of payment, this will make it more convenient for consumers to utilize and store crypto, which can drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. If you’re committed to the long-term, being patient and disciplined will be key.