It’s been a tough journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from the previous high in November 2021. When things were going downhill after the FTX crash made them look even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. And this growing use case could result in more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the potential in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to higher prices.
Government regulations
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is 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 expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency 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 increase, it will become easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, this will make it easier for customers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term patience and discipline will be key.