It’s been a rough ride for the crypto market in 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. When things were looking down after the FTX crash turned things 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 had many dips over the years. Every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows finance services built upon 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 crypto market grows as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to explore crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be easier for people to buy and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store crypto, which can drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long-term Being patient and disciplined is crucial.