It’s been a tough journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70 percent from its previous high on November 20, 2021. And just when things were getting worse, the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Each time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the resistance and reached 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 before, fall-offs tend to be followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case can lead to more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and understand the concept. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this could raise prices.
sen. Sanctions compliance for crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built using blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are starting to look at crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase it will be more convenient for people to buy and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting crypto as a form of payment, it makes it easier for customers to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long haul Being patient and disciplined will be key.