It’s been a tough ride for the crypto market through 2022. As of November the market was down by 70% from its previous peak at the end of November. And just when things were looking down, the FTX crash turned them more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke that record and hit a record highest 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. And just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could lead to increasing participation in the market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and result in higher prices.
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
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 continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long run patience and discipline is crucial.