It’s been a difficult ride for the crypto market in 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were looking down after the FTX crash made them look worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. Each time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, the past has proven that after 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 usually followed by a prolonged bull run, which eventually 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 come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand can lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. With increasing numbers of people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
mutt crypto price
Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto 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 in an asset like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which can increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are committed to the long run, being patient and disciplined will be key.