It’s been a difficult journey for the cryptocurrency market until 2022. In November the market was down by more than 70 percent from its previous high at the end of November. When things were getting worse after the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. Every time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. As more and more everyday people become aware of crypto and how 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 market for crypto grows increasing numbers of people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
kai crypto price prediction
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to look at crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize 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 become easier for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a form of payment, this will make it easier for consumers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long-term Being patient and disciplined will be key.