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Will Crypto Recover? Here’s What You Should Know

March 30, 2023

3 min Read

Written by Kelli Francis

Edited by Melanie Grafil

Bangkok, Thailand - 1 July 2021: Cryptocurrency on Binance trading app, Bitcoin BTC with altcoin digital coin crypto currency, BNB, Ethereum, Dogecoin, Cardano, defi p2p decentralized fintech market.

Chinnapong / Getty Images

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Crypto is an investment that is widely known for its volatility, with dramatic fluctuations that can work in an investor’s favor or against it. Both scenarios have played out so far in 2023 and many are wondering what might be next, so here is a look.

Will Crypto Recover in 2023?

Several factors play a role in whether or not crypto will recover this year, including but not limited to:

How the banking industry fares, given recent closures.
Whether or not the government continues to back assets held at closed banks, especially collapsed banks that held crypto investments.
How investor sentiment shifts as economic developments and policy efforts continue.

Will Crypto Come Back Up Again?

Current speculation hints at a potentially uncertain year ahead for crypto, despite a relatively robust start to 2023. Analysts will be watching the price of bitcoin, and many feel that its ability or lack thereof to hold a value of $25,000 will be a telltale sign for the cryptocurrency. The actions of the Federal Reserve will also play a critical role in investor confidence.

These are the factors at play, but the question remains: Is the crypto market ever going to recover?

It’s nearly impossible to predict the trajectory of cryptocurrency because, like all investments, there is never a guarantee of performance or return. What is known is that historically this type of investment has yielded plenty of gains and losses over time, and that dual reality is likely to continue.

What Makes Crypto Different from Other Investments

Unlike stocks, ETFs or even U.S. savings bonds, crypto is a highly speculative investment with a long history of dramatic ups and downs. Certainly, crypto has experienced crashes before.

NASDAQ reported that the last crypto winter occurred from January 2018 to early 2021. The crypto market has served as both a safe haven and a source of unpredictability for investors, but it is beginning to behave more like traditional asset classes.

Although crypto is growing in popularity, with an increasing number of companies accepting it as a form of payment, no one knows if today’s coins will be around decades from now.

An Investment You Can Easily Buy Low

The longstanding investment advice to buy low and sell high is quite possible with cryptocurrency, given its sometimes erratic nature. As long as you’re not a risk-averse investor, it’s not too late to buy the dip in bitcoin and other cryptocurrencies. To increase your odds of investment success, watch a coin’s overall performance and fees, know your storage and security options, pick a reputable exchange and stick to coins with a known reputation and a high market cap.

Dawn Allcot and Chris Ozarowski contributed to the reporting for this article.

Information is accurate as of March 30, 2023.

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