It’s been a rough experience for the crypto market in 2022. In November the market had dropped by more than 70 percent from its previous high on November 20, 2021. Just when the market was going downhill, the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. 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 the record and hit a record record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every 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 long bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people being involved in the market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. As more and more people are educated about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to learn about and understand the concept. As understanding and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a means of payment, it will make it easier for customers to utilize and store crypto, which can increase demand and price.
So, will crypto grow in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will have a rebound by 2023. For those committed to the long run patience and discipline is essential.