It’s been a rough experience for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high in November 2021. And just when things were going downhill after the FTX crash turned things even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017 it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to increasing participation in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times, 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 for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways 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 cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
microsoft that target crypto wallets cryware
Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for people to buy and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants start accepting cryptocurrency as a method of payment, it will make it more convenient for customers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re in it for the long-term, being patient and disciplined is essential.