It’s been a rough journey for the cryptocurrency market until 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. And just when things were getting worse, the FTX crash made them look more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. Every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could lead to more people being involved in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of 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 make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will boost demand and increase prices.
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 rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, it will make it more convenient for customers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long haul Being patient and disciplined is crucial.