It’s been a difficult ride for the crypto market in 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was looking down after the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it’s rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could result in more people getting involved in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are starting 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 higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investments, are starting to look at crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more merchants accept crypto as a form of payment, it makes it easier for people to use and hold crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long run, being patient and disciplined is crucial.