It’s been a rough ride for the crypto market through 2022. By November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. And just when things were going downhill after the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and result in more expensive prices.
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested 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 crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that represent 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 issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market could be able to see a rebound in 2023. For those in it for the long run, being patient and disciplined is essential.