It’s been a tough ride for the crypto market until 2022. In November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were getting worse 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 had many dips in the past. And every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017, it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. This growing demand could lead to increasing participation in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a form of payment, it will make it more convenient for people to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline is crucial.