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 on November 20, 2021. When things were looking down after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Every 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 before reaching a bottom of $150. In 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a prolonged bull run that finally 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 made significant progress 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 cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher 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. As more and more everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are starting to learn about and appreciate it. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services built using blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be easier for consumers to purchase and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, it makes it easier for customers to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long-term Being patient and disciplined is essential.