It’s been a rough journey for the cryptocurrency market until 2022. By November the market had dropped by more than 70% from its previous peak in November 2021. And just when things were getting worse, the FTX crash made them look worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Each time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke that record, and hit a new high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run that finally surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to more people getting involved in the market which could increase the price.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services built using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a means of payment, this will make it more convenient for people to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long-term, being patient and disciplined is crucial.