It’s been a tough journey for the cryptocurrency market until 2022. In November the market had dropped by 70 percent from its previous high on November 20, 2021. When things were going downhill after the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. And every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could result in more people getting involved in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. As more and more everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could drive up prices.
financial analysis on crypto coins
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to show interest in crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for people to buy and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like 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 consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long haul, being patient and disciplined is essential.