It’s been a tough experience for the crypto market until 2022. In November, the market had dipped by 70 percent from the previous high at the end of November. Just when the market was getting worse, the FTX crash turned them even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through the 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 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 lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
As the market for crypto continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could drive up prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.