It’s been a rough experience for the crypto market until 2022. In November the market had dropped by more than 70 percent from the previous high on November 20, 2021. And just when things were looking down after the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could lead to more people getting involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract 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 applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of 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 expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. As more and more people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to become aware about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned investments, are starting to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a form of payment, this makes it easier for people to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. If you’re committed to the long haul, being patient and disciplined is crucial.