It’s been a difficult experience for the crypto market until 2022. In November the market had dropped by 70 percent from its previous high at the end of November. And just when things were looking down after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. Every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more 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. The growing popularity of crypto could lead to increasing participation in the market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. This increased 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 continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of people become aware of 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 cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments 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 government-owned investments, are beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants begin accepting cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store crypto, which can boost demand and increase prices.
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 could have a rebound by 2023. For those committed to the long haul Being patient and disciplined is essential.