It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. Each time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record 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 after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and lead to higher prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules 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 offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. 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 market for crypto grows as more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock 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 consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this makes it easier for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long-term, being patient and disciplined will be key.