It’s been a rough journey for the cryptocurrency market until 2022. In November the market was down by more than 70% from its previous peak at the end of November. Just when the market was getting worse, the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Each time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. 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
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people being involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications 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. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to show interest in crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for international payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase, it will become easier for people to buy and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants begin accepting crypto as a form of payment, this will make it more convenient for customers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term Being patient and disciplined is crucial.