It’s been a rough journey for the cryptocurrency market until 2022. As of November the market had dropped by 70 percent from its previous high at the end of November. When things were going downhill, the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Every time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke that record, and hit a new high of $19,600. In 2018, the price was at $3,100. In 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to greater prices.
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased 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 get involved in the market for crypto. As more and more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which can drive up prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, this will make it easier for consumers to hold and use crypto, which can increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul Being patient and disciplined is essential.