It’s been a difficult journey for the cryptocurrency market until 2022. By November the market was down by 70% from its previous peak in November 2021. When things were looking down, the FTX crash made them look even more dire. 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. Each time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. 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
Just like we’ve seen previously, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could result in increasing participation in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent 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 in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher 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. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, this will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, will crypto grow in 2023? The only way to know is time. With these things to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. For those in it for the long haul Being patient and disciplined will be key.