It’s been a tough journey for the cryptocurrency market in 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. When things were getting worse, the FTX crash turned them worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors 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 bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that can increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long haul, being patient and disciplined will be key.