It’s been a difficult experience for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high on November 20, 2021. When things were getting worse, the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Each time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people getting involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to 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 cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are starting to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a form of payment, this will make it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long run, being patient and disciplined is crucial.