It’s been a difficult ride for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak at the end of November. When things were looking down and down, the FTX crash turned them more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and result in greater prices.
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. With increasing numbers of people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which can increase prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase it will be more convenient for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, this will make it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline is essential.