It’s been a difficult experience for the crypto market until 2022. In November the market had dropped by 70 percent from the previous high at the end of November. When things were looking down and down, the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had 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
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of 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 beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest 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 result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
social crypto token
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses accept crypto as a form of payment, this will make it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. For those in it for the long run Being patient and disciplined is crucial.