It’s been a difficult journey for the cryptocurrency market until 2022. By November the market had dropped by more than 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. And every time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, 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 reached a record high of $68,000 in November 2021. 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 previously, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to increasing participation in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many 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 more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to invest in the crypto market. As more and more everyday people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding 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 rates for the crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a means of payment, it makes it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long haul patience and discipline will be key.