It’s been a rough ride for the crypto market through 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were looking down after the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Every time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. 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 in the past, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could result in more people getting involved in the crypto market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased 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 get involved in the crypto market. With increasing numbers of everyday people are educated about cryptocurrency and investing 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 market for crypto grows, more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
crypto capo
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased 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 be more convenient for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers accept crypto as a form of payment, it will make it more convenient for customers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will see a recovery in 2023. If you’re committed to the long-term Being patient and disciplined is essential.