It’s been a tough ride for the crypto market through 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were looking down after the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Each time, it’s bounced back with a big 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. However, in 2017, it broke the record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that at the end of every 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 lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to more expensive prices.
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of retailers accept crypto as a form of payment, this will make it more convenient for customers to hold and use crypto, which could drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long run Being patient and disciplined is crucial.