It’s been a tough journey for the cryptocurrency market until 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. When things were going downhill, 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 cryptocurrency market, specifically Bitcoin has had many dips in the past. And every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke the record, and hit a new high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs 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 not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate is 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 crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. In the future, as more people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services built using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to explore crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be easier for consumers to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a form of payment, this makes it easier for people to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul Being patient and disciplined will be key.