It’s been a tough experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was going downhill, the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and lead to higher prices.
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that can increase prices.
reading crypto candlesticks
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to show interest in crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions this can lead to a rise in 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 grow, it will become easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created 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 businesses start accepting crypto as a means of payment, this will make it more convenient for consumers to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul, being patient and disciplined is crucial.