It’s been a difficult ride for the crypto market until 2022. By November the market was down by 70 percent from its previous high at the end of November. When things were getting worse and down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. And every time, it’s rebounded with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. And this growing use case can lead to increasing participation in the market which could drive the prices up.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. As more and more everyday people become aware of crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about it and comprehend it. As understanding and acceptance of crypto grows it could result in more people purchasing and holding crypto, which can drive up prices.
wash sale on crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned investments, are now beginning to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, this will make it more convenient for people to utilize and store crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined will be key.