It’s been a rough experience for the crypto market in 2022. By November, the market had dipped by 70 percent from the previous high on November 20, 2021. When things were going downhill and down, the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could lead to more people being involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many 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 industries are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people learn about cryptocurrency and investing 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 market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to explore crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a means of payment, this will make it easier for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are committed to the long run Being patient and disciplined is essential.