It’s been a difficult experience for the crypto market until 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned things even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many drops in the past. Each 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 before reaching a bottom of $150. But, in 2017, it broke that record and hit a record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, 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 are typically followed by a prolonged bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen 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 companies and industries embracing it, its usage and acceptance is growing. From gaming to finance 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, drive the prices up.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. As more and more 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 become aware about and understand it. As understanding and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this could drive up prices.
gero wallet crypto price
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in regular 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 instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Use of crypto for international payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, this will make it easier for people to use and hold crypto, which could increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long haul, being patient and disciplined will be key.