It’s been a rough ride for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. When things were going downhill, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. And every time, it’s rebounded with a big rally.
For example, 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 record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had 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
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. This growing demand could lead to more people being involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which could raise prices.
htr crypto price
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a means of payment, it makes it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.