It’s been a tough ride for the crypto market through 2022. By November the market had dropped by more than 70 percent from the previous high at the end of November. When things were going downhill and down, the FTX crash turned things even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown 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 previously, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain it could result in 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, also known as individual investors, are also starting to get involved in the cryptocurrency market. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed 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 grows as more and more businesses are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for international payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals 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.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more merchants start accepting crypto as a means of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re committed to the long run Being patient and disciplined will be key.