It’s been a difficult experience for the crypto market through 2022. By November, the market had dipped by 70 percent from its previous high in November 2021. When things were going downhill and down, 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 had many dips over the years. Every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown 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 previously, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. This growing demand can lead to increasing participation in the market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. As more and more people are educated about crypto and how to invest 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 market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this can raise prices.
game credits crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a form of payment, it makes it easier for consumers to use and hold crypto, which can increase demand and price.
So, will crypto grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market could have a rebound by 2023. For those committed to the long haul patience and discipline will be key.