It’s been a rough journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. And just when things were looking down, the FTX crash made them look even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017, it broke that record and reached a new highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. 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 before, fall-offs tend to be followed by a prolonged bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing, 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 increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify 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 higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants begin accepting crypto as a form of payment, it will make it easier for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long run, being patient and disciplined is crucial.