It’s been a difficult experience for the crypto market until 2022. By November, the market had dipped by 70% from its previous peak at the end of November. When things were going downhill after the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to more people being involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and increased 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, or individual investors, are also starting to get involved in the crypto market. As more and more people are educated about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
eclipse crypto price
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, this makes it easier for customers to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those committed to the long haul Being patient and disciplined will be key.