It’s been a tough journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. When things were looking down and down, the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Each time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke that record and hit a record high of $19,600. In 2018, the price was at $3,100. 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 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 before, fall-offs tend to be followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming 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.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. In the future, as more people become aware of 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 cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate it. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, it makes it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long-term Being patient and disciplined is crucial.