It’s been a difficult journey for the cryptocurrency market through 2022. In November the market was down by more than 70 percent from the previous high at the end of November. When things were getting worse and down, the FTX crash turned things even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Each time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. In 2017, it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about and appreciate it. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
request crypto price prediction 2025
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and increased 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 form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to look at crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. With these things being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those committed to the long haul, being patient and disciplined is essential.