It’s been a rough ride for the crypto market until 2022. By November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse after the FTX crash turned things worse. What is the likelihood that 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 drops in the past. Each time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation 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 people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting crypto as a form of payment, it will make it more convenient for customers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market could be able to see a rebound in 2023. For those in it for the long haul, being patient and disciplined will be key.