It’s been a tough ride for the crypto market through 2022. In November the market had dropped by more than 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
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 increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. In the future, as more people are educated about crypto and the best ways 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 crypto market is maturing increasing numbers of people are beginning to become aware about it and comprehend it. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
modi crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are starting to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is the ability to facilitate 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.
An increasing number of crypto ATM’s
As 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, or digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses begin accepting crypto as a means of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. For those committed to the long run patience and discipline is crucial.