It’s been a tough ride for the crypto market until 2022. In November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse, the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand can lead to more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. 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.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services built on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, 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 increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this will make it more convenient for customers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long-term Being patient and disciplined will be key.