It’s been a rough ride for the crypto market in 2022. By November the market was down by 70% from its previous peak at the end of November. Just when the market was going downhill after the FTX crash turned things even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. Each time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. And 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 before, fall-offs are usually followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand can lead to increasing participation in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. As more and more everyday 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 crypto market continues to mature, more and more people are starting to learn about and understand the concept. 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 raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase, it will become easier for individuals to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more retailers begin accepting crypto as a form of payment, it makes it easier for people to hold and use cryptocurrency, which will increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long-term patience and discipline is essential.