It’s been a difficult ride for the crypto market in 2022. As of November the market had dropped by 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash turned things even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. And every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each 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 prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand can lead to more people being involved in the market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as increased 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 starting to invest in the market for crypto. As more and more everyday people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can drive up prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to explore crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits 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, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency 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
With the increasing number of businesses begin accepting crypto as a form of payment, this makes it easier for customers to use and hold crypto, which can increase demand and price.
So, will crypto grow in 2023? The only way to know is time. But with these factors being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined will be key.