It’s been a tough ride for the crypto market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash turned things more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case could result in more people being involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the market for crypto. As more and more people learn about crypto and how to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about and appreciate it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase, it will become easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, it makes it easier for consumers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. For those in it for the long run Being patient and disciplined is essential.