It’s been a tough experience for the crypto market through 2022. By November the market had dropped by more than 70 percent from the previous high on November 20, 2021. Just when the market was getting worse after the FTX crash turned things more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Each time, it’s rebounded with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
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 taking to it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in increasing participation in the market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which could raise prices.
mason versluis crypto
Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be created using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting cryptocurrency as a method of payment, this will make it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are looking to invest for the long-term, being patient and disciplined will be key.