It’s been a difficult experience for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash made them look 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 drops in the past. Each time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve had 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
As we’ve seen in the past, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. This growing demand could result in more people getting involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. In the future, as more people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning using crypto to be a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals 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
The number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and store crypto, which could increase demand and price.
Security tokens are developed for development
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 sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this will make it more convenient for customers to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long haul patience and discipline will be key.