It’s been a difficult experience for the crypto market through 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was going downhill after 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. Every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in 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 taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case could result in more people getting involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and result in higher prices.
Government regulations
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of everyday people become aware of 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 cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand the concept. As awareness and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for people to buy and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses start accepting cryptocurrency as a method 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 rise in 2023? It’s only time to find out. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long run Being patient and disciplined will be key.