It’s been a rough experience for the crypto market until 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017 it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through that 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 after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
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 it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to more people getting 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 seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase, it will become easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses begin accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.