It’s been a difficult experience for the crypto market through 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were looking down, the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. And every time, it’s rebounded with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in 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 taking to it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and 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 people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting crypto as a means of payment, this will make it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long run patience and discipline will be key.