It’s been a tough ride for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was going downhill after the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. Each time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries adopting it, its usage 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 getting involved in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people are educated about crypto and how to invest 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 as more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase, it will become easier for people to buy and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept crypto as a form of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline is crucial.