It’s been a rough experience for the crypto market until 2022. In November the market had dropped by more than 70 percent from its previous high at the end of November. And just when things were getting worse and down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each 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. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high price. This pattern 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 embracing it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to increasing participation in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. As more and more everyday people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that can raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, this could increase demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a means of payment, this will make it easier for people to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. For those committed to the long run patience and discipline is crucial.