It’s been a tough experience for the crypto market until 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was getting worse and down, the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Each time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke the 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 that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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
As we’ve seen in the past, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish 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 technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. As more and more people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, this makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long-term Being patient and disciplined will be key.