It’s been a rough ride for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high at the end of November. When things were going downhill, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen 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 previously, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations 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 underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
wonderfi crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses begin accepting crypto as a form of payment, this will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul patience and discipline is essential.