It’s been a tough experience for the crypto market until 2022. By November, the market had dipped by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash made them look more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen 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 before, fall-offs tend to be followed by a prolonged bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case can lead to more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the market for crypto. As more and more people are educated 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 continues to mature as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could increase prices.
frontier crypto price
Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to increase, it will become easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers begin accepting crypto as a means of payment, it makes it easier for customers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.