It’s been a tough journey for the cryptocurrency market through 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were getting worse after the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Each time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip, there’s a bull run.
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 that eventually surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have 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 growing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more everyday people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
amp crypto and amazon
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for individuals to purchase and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a form of payment, it will make it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.