It’s been a tough experience for the crypto market through 2022. In November the market was down by 70% from its previous peak on November 20, 2021. Just when the market was looking down and down, the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could result in more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. With increasing numbers of people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about and appreciate it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created upon blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to explore crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses accept cryptocurrency as a method of payment, it makes it easier for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long run Being patient and disciplined is essential.