It’s been a rough experience for the crypto market until 2022. By November the market had dropped by 70 percent from the previous high in November 2021. When things were getting worse and down, 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 seen many drops in the past. Every time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
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 market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
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 the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. This growing demand can lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. As more and more people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services built upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for consumers to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses start accepting crypto as a means of payment, it will make it more convenient for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long run patience and discipline is essential.