It’s been a rough experience for the crypto market until 2022. In November the market had dropped by 70% from its previous peak at the end of November. And just when things were getting worse, the FTX crash turned them more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it’s rebounded with a big rally.
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 the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a prolonged bull run, which eventually 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
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people learn about crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are starting to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can raise prices.
shift crypto card
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi continues to grow 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 continues to grow as more and more businesses are beginning accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to show interest in crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for people to buy and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long-term, being patient and disciplined is essential.