It’s been a difficult experience for the crypto market until 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Each time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to increasing participation in the crypto market and, in turn, boost prices.
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 banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. 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 many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about and understand the concept. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which could raise prices.
crypto project management
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to show interest in crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for people to buy and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
As more and more retailers accept cryptocurrency as a method of payment, this will make it easier for customers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long haul Being patient and disciplined will be key.