It’s been a tough journey for the cryptocurrency market until 2022. In November the market had dropped by 70% from its previous peak at the end of November. And just when things were going downhill after the FTX crash turned things even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases 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 could stimulate more investment and excitement in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. As more and more 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 crypto market grows increasing numbers of people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
obsidian card crypto
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants accept crypto as a form of payment, it makes it easier for people to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term, being patient and disciplined is crucial.