It’s been a tough ride for the crypto market through 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was getting worse and down, the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. And every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Government regulations
As the crypto market grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the 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 due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature, more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
multi crypto wallet open source
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses accept crypto as a means of payment, it makes it easier for customers to use and hold crypto, which could drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long-term patience and discipline will be key.