It’s been a rough ride for the crypto market until 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. And just when things were looking down and down, the FTX crash made them look worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could result in more people being involved in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. As more and more people are educated about crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as 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 more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of retailers accept crypto as a means of payment, this will make it more convenient for people to utilize and store crypto, which could increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re committed to the long haul Being patient and disciplined is essential.