It’s been a difficult ride for the crypto market in 2022. In November the market was down by 70 percent from its previous high in November 2021. And just when things were getting worse, the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. And every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a long bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market which could boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can increase prices.
passive income from crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of 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
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, this makes it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. For those in it for the long haul patience and discipline is crucial.