It’s been a rough journey for the cryptocurrency market until 2022. As of November, the market had dipped by more than 70% from its previous peak at the end of November. Just when the market was looking down and down, the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Every time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people being involved in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive 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 could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
mac crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a means of payment, it will make it more convenient for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term, being patient and disciplined is essential.