It’s been a tough journey for the cryptocurrency market until 2022. In November, the market had dipped by 70 percent from its previous high at the end of November. When things were getting worse and down, the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Each time, it has bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in greater prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more people learn about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can raise prices.
cher crypto price
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate, 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 rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a form of payment, this makes it easier for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline is crucial.