It’s been a difficult experience for the crypto market until 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was going downhill after the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017 it broke that record and hit a record high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors 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 market for crypto. As more and more everyday people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which can drive up prices.
crypto fund of funds
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, it will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long run, being patient and disciplined is essential.