It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. And just when things were getting worse after the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. And every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for crypto. 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 potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the market for crypto. In the future, as more people are educated 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 is maturing increasing numbers of people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can drive up prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in 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 easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing 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 prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long-term patience and discipline is crucial.