It’s been a rough experience for the crypto market until 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. When things were going downhill and down, the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. And this growing use case could lead to more people being involved in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions can bring stability to the market for crypto and result in greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of people learn about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to learn about and understand the concept. As awareness and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services developed using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in crypto as an 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 cross-border payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers start accepting crypto as a form of payment, this will make it more convenient for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long-term Being patient and disciplined is essential.