It’s been a difficult experience for the crypto market in 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. Just when the market was going downhill after the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. And every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also 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 taking to it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
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 get involved in the cryptocurrency market. As more and more people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and understand the concept. As understanding and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a means of payment, this makes it easier for customers to hold and use crypto, which could drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined is essential.