It’s been a difficult experience for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. When things were going downhill and down, the FTX crash made them look worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it has bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017 it broke that record and reached a new high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could result in more people being involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to explore crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
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 costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be easier for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock is a fast-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 rates for the crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, it makes it easier for customers to use and hold crypto, which could drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are committed to the long-term, being patient and disciplined is crucial.