It’s been a difficult experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. When things were getting worse after the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run, which eventually breaks through the resistance created by the previous market’s highest 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 more businesses and industries taking to it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to more expensive prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. As more and more everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
wedge pattern crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to show interest in crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this makes it easier for people to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the cryptocurrency 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.