It’s been a difficult journey for the cryptocurrency market in 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were going downhill, the FTX crash turned things worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Each time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized 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.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond 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 could drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain and 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 even individual investors, are also starting to get involved in the market for crypto. In the future, as more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be built on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, this will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re committed to the long-term, being patient and disciplined is essential.