It’s been a difficult journey for the cryptocurrency market through 2022. As of November, the market had dipped by more than 70 percent from its previous high at the end of November. Just when the market was getting worse and down, the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Each time, it’s rebounded with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. As more and more everyday people are educated about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about it and comprehend it. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
how to check crypto wallet balance
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to explore crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
As more and more retailers accept cryptocurrency as a method of payment, this will make it easier for consumers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market could be able to see a rebound in 2023. For those committed to the long-term, being patient and disciplined is crucial.