It’s been a difficult ride for the crypto market in 2022. As of November the market was down by 70 percent from its previous high at the end of November. When things were going downhill, the FTX crash made them look even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. Every time, it’s rebounded with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017 it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. And 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
Just like we’ve seen in the past, 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 in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people getting involved in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people learn 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 crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about and appreciate it. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are starting to look at crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this will make it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market will have a rebound by 2023. If you’re looking to invest for the long-term patience and discipline is crucial.