It’s been a tough journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. When things were going downhill after the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. 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 a full year, reaching a low of $150. In 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. And this growing use case could lead to more people being involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. As more and more everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to more people buying 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 finance services created on top of blockchain technology. As DeFi expands and more platforms and projects become available, this 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 beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase it will be easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, it makes it easier for people to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long-term patience and discipline is essential.