It’s been a difficult experience for the crypto market until 2022. In November the market had dropped by 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it’s rebounded with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in not just 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 growing. From banking to gaming, crypto is being used in many ways. This growing demand could lead to more people being involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows, more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, it makes it easier for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long-term Being patient and disciplined is essential.