It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. And every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the crypto market which could boost prices.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors 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 more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services built on top of blockchain technology. As DeFi grows 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 crypto market is growing increasing numbers of companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock, 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 thus higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers accept crypto as a form of payment, it will make it more convenient for customers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long run, being patient and disciplined is crucial.