It’s been a rough ride for the crypto market in 2022. As of November, the market had dipped by 70 percent from its previous high in November 2021. When things were going downhill, the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. And every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record, and hit 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 new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that finally surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case can lead to increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to look at crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its capability to perform fast and cheap 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.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be easier for people to buy and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting crypto as a means of payment, this will make it more convenient for consumers to hold and use crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long-term Being patient and disciplined is essential.