It’s been a tough experience for the crypto market until 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in 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 adopting it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in more people being involved in the market, which in turn could boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies 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 industries are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to become aware about and understand the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a form 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
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to look at crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase it will be more convenient for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be 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 merchants start accepting cryptocurrency as a method of payment, it makes it easier for customers to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long haul patience and discipline is crucial.