It’s been a rough journey for the cryptocurrency market until 2022. As of November the market had dropped by 70 percent from its previous high in November 2021. When things were going downhill after the FTX crash turned them even 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 many drops in the past. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. In 2017 it broke that record and reached a new highest of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run, which 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 cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. This growing demand can lead to more people being involved in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
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 continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services built upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular 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 investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting crypto as a means of payment, it will make it easier for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline is essential.