It’s been a rough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash made them look 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’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017 it broke that record, and hit a new high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. This growing demand can lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. As more and more 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 cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, it makes it easier for people to utilize and store crypto, which can increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. For those committed to the long run Being patient and disciplined will be key.