It’s been a difficult ride for the crypto market until 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. And just when things were going downhill and down, the FTX crash turned them worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. And every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more people learn about crypto and how to invest 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 market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to look at crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a form of payment, it will make it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could have a rebound by 2023. For those committed to the long haul Being patient and disciplined is essential.