It’s been a tough journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70% from its previous peak in November 2021. And just when things were looking down, the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke the record and reached a new high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than 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 better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography 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 use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can raise prices.
sun crypto price
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows 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 everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a form of payment, it will make it more convenient for customers to hold and use crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long-term, being patient and disciplined will be key.