It’s been a tough experience for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high in November 2021. Just when the market was going downhill, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Each time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This is evident in more than 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 adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the market which could increase the price.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is 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 grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. With increasing numbers of people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about and understand it. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a means of payment, it will make it easier for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will have a rebound by 2023. And for those who are in it for the long haul patience and discipline is essential.