It’s been a difficult journey for the cryptocurrency market through 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. And just when things were looking down after the FTX crash turned things more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. And every time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged 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 cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. And this growing use case could lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people learn about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are beginning to become aware about it and comprehend it. As awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can increase prices.
microsoft infostealers target crypto wallets
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are now beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s increase it will be more convenient for individuals to purchase and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this makes it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline is crucial.