It’s been a difficult ride for the crypto market through 2022. By November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill, the FTX crash made them look even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. And every time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain, this could lead to increased demand for crypto and more expensive 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 invest in the crypto market. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate it. As awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services built upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent 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 could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting crypto as a means of payment, it will make it more convenient for consumers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long run Being patient and disciplined is essential.