It’s been a rough ride for the crypto market until 2022. By November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke the record and reached a new record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just 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.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the market for crypto. As more and more people become aware of crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long haul, being patient and disciplined is essential.