It’s been a tough experience for the crypto market through 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was going downhill and down, the FTX crash turned them even more dire. The question is, can 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 has bounced back by a massive rise.
In 2013, for instance, 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 the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. 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 in the past, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in many ways. This growing demand could result in increasing participation in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can increase prices.
market cycle crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are now beginning to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a form of payment, this will make it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long haul Being patient and disciplined is essential.