It’s been a rough experience for the crypto market in 2022. By November the market was down by 70 percent from its previous high at the end of November. And just when things were going downhill, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Each time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. This growing demand can lead to more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to invest 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 more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can raise prices.
prism crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting crypto as a form of payment, it makes it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.