It’s been a tough experience for the crypto market until 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. Just when the market was looking down and down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. Every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip, there’s a bull run.
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 market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could drive up prices.
dream crypto coin
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created using blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a form of payment, this will make it more convenient for customers to use and hold crypto, which can drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul patience and discipline is crucial.