It’s been a difficult experience for the crypto market until 2022. By November, the market had dipped by 70% from its previous peak at the end of November. Just when the market was getting worse and down, the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Each time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could result in increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. With increasing numbers of everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for consumers to purchase and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.