It’s been a tough ride for the crypto market through 2022. In November the market was down by 70 percent from the previous high at the end of November. And just when things were looking down, the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. And every time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017, it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more 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 market for crypto continues to mature, more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are starting to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as 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 higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept cryptocurrency as a method of payment, it will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. For those in it for the long haul, being patient and disciplined is crucial.