It’s been a difficult journey for the cryptocurrency market in 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was going downhill and down, the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen 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
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in higher prices.
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto it could result in more people buying and holding crypto, which could increase prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are starting to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow it will be easier for people to buy and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, it makes it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline is crucial.