It’s been a difficult ride for the crypto market until 2022. In November, the market had dipped by 70 percent from the previous high in November 2021. When things were getting worse and down, the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke that record and reached 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 reached a new high of $68,000 in November 2021. Then, just like that we’ve seen 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
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also 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 embracing it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people being involved in the market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of 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 continues to mature increasing numbers of people are beginning to become aware about and appreciate 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 could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a form of payment, this will make it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long run patience and discipline is essential.