It’s been a tough experience for the crypto market through 2022. As of November the market was down by 70 percent from its previous high in November 2021. Just when the market was going downhill after the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. And every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017, it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen 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 eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, it will make it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long-term patience and discipline will be key.