It’s been a difficult journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was getting worse, the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Each time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high 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 made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This will 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, the potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. As more and more people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
seeds crypto price
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services developed upon blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
As more and more businesses begin accepting crypto as a means of payment, this makes it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long run Being patient and disciplined is crucial.