It’s been a tough experience for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people getting involved in the market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that could drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, it makes it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. And for those who are committed to the long haul patience and discipline is crucial.