It’s been a rough journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from the previous high in November 2021. When things were looking down and down, the FTX crash turned them even more dire. So, will 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. Each time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every 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 lengthy bull run, which eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to increasing participation in the market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing as more and more people are starting to learn about and understand it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
safe chaos crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as 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. As more security tokens are issued and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a form of payment, this will make it easier for consumers to utilize and store crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long run, being patient and disciplined is crucial.