It’s been a tough ride for the crypto market until 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were getting worse after the FTX crash turned things worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. Each time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had 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
As we’ve seen in the past, dips are typically followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
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 embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and result in greater prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more businesses accept crypto as a form of payment, this will make it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long run patience and discipline is essential.