It’s been a tough experience for the crypto market through 2022. By November the market had dropped by more than 70 percent from its previous high at the end of November. Just when the market was looking down after the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen 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
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people being involved in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this can raise prices.
aelf crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are starting to explore crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a form of payment, this will make it easier for customers to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined is crucial.