It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and higher 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 get involved in the cryptocurrency market. As more and more everyday people learn 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 cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this could drive up prices.
nkn crypto prediction
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to look at crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate is a fast-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 thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined is crucial.