It’s been a rough journey for the cryptocurrency market until 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. And just when things were going downhill and down, the FTX crash turned them even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Each time, it’s rebounded with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services built using blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a form of payment, it will make it easier for consumers to use and hold crypto, which can drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long-term Being patient and disciplined is crucial.