It’s been a difficult journey for the cryptocurrency market through 2022. In November the market was down by 70 percent from the previous high at the end of November. Just when the market was going downhill, the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. And every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen 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
As we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. And this growing use case can lead to more people being involved in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi expands and more projects and platforms come online, this 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 means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are starting to look at crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase, it will become easier for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this will make it easier for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long run Being patient and disciplined is crucial.