It’s been a difficult experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from its previous high on November 20, 2021. When things were looking down, the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. And every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017, it broke the record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case can lead to increasing participation in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can drive up prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services built on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this will make it easier for people to hold and use crypto, which could drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market will see a recovery in 2023. For those committed to the long haul, being patient and disciplined is essential.