It’s been a tough experience for the crypto market through 2022. In November the market had dropped by 70% from its previous peak at the end of November. When things were getting worse, the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that finally breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond 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 could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many 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 higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses 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 higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to look at crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase, it will become easier for people to buy and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, this makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.