It’s been a tough experience for the crypto market through 2022. As of November the market was down by 70 percent from its previous high at the end of November. Just when the market was getting worse after the FTX crash turned things even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. Each time, it’s bounced back by a massive rise.
For instance, in 2013, 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 that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us 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 in the past, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. This growing demand can lead to more people being involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. As more and more everyday people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about and understand the concept. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
vanity crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow it will be easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants accept crypto as a means of payment, it makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long haul patience and discipline will be key.