It’s been a tough journey for the cryptocurrency market through 2022. By November, the market had dipped by more than 70 percent from its previous high in November 2021. Just when the market was going downhill, the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. Each time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows finance services developed upon blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses accept cryptocurrency as a method of payment, it makes it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re looking to invest for the long haul, being patient and disciplined will be key.