It’s been a difficult journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from the previous high in November 2021. Just when the market was looking down, the FTX crash turned things even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Each time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us 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 previously, dips tend to be followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market and, in turn, 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 cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about and appreciate the concept. As awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which can raise prices.
crypto ledn 540m 10t holdingskhatri theblock
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be more convenient for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more businesses begin accepting cryptocurrency as a method of payment, this makes it easier for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long haul, being patient and disciplined is essential.