It’s been a rough journey for the cryptocurrency market through 2022. In November, the market had dipped by more than 70 percent from the previous high at the end of November. And just when things were looking down, the FTX crash turned things more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. 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, reaching a low of $150. In 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high 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 companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just 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 stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of cryptocurrency and investing 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 cryptocurrency
As the crypto market grows, more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
bluechip crypto
Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be created using blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for people to buy and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a means of payment, it makes it easier for people to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, 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 run, being patient and disciplined is crucial.