It’s been a difficult experience for the crypto market until 2022. As of November the market had dropped by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash made them look more dire. The question is, can 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 has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, it will make it more convenient for consumers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are committed to the long haul, being patient and disciplined is crucial.