It’s been a tough journey for the cryptocurrency market in 2022. By November the market had dropped by 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash turned things even more dire. 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. Each time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017 it broke that record and hit a record highest of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules 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 underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as 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, or individual investors, are also starting to invest in the market for crypto. With increasing numbers of people are educated about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this will make it more convenient for people to hold and use cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.