It’s been a rough ride for the crypto market in 2022. As of November, the market had dipped by 70 percent from the previous high at the end of November. Just when the market was getting worse after the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. Then, 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 in the past, dips are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in greater prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services built upon blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a form 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 state-owned instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency 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 this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers accept cryptocurrency as a method of payment, it makes it easier for people to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline is essential.