It’s been a difficult journey for the cryptocurrency market through 2022. By November, the market had dipped by 70% from its previous peak at the end of November. When things were getting worse and down, the FTX crash made them look more dire. 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. And every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017 it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had 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 are usually followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern 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 businesses and industries taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could raise prices.
evx crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of 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 increase it will be easier for people to buy and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a form of payment, it makes it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.