It’s been a tough experience for the crypto market until 2022. As of November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was getting worse and down, the FTX crash turned things even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people being involved in the market which could drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
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 investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. In the future, as more people are educated about crypto and how to invest in it this could result in increased 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 understand the concept. As understanding and acceptance grows of crypto it could result in more people buying and holding crypto, which can raise prices.
hedron crypto chart
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to look at crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for people to buy and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, it makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market will have a rebound by 2023. If you’re looking to invest for the long run Being patient and disciplined is essential.