It’s been a rough experience for the crypto market until 2022. In November the market had dropped by 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. And every time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto 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
The sovereign wealth fund, also known as state-owned investments, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants accept cryptocurrency as a method of payment, this makes it easier for people to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long haul Being patient and disciplined will be key.