It’s been a difficult journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. And just when things were going downhill and down, the FTX crash turned things more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. And every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few 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 for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that 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 on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase it will be easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a means of payment, it makes it easier for consumers to utilize and store crypto, which could drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re committed to the long haul patience and discipline will be key.