It’s been a difficult ride for the crypto market through 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. When things were getting worse and down, 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 had its fair share of dips in the past. And every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could drive up prices.
lakers crypto arena
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market 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 higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a means of payment, it will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long run, being patient and disciplined is crucial.