It’s been a difficult experience for the crypto market until 2022. By November the market had dropped by 70% from its previous peak in November 2021. When things were going downhill and down, the FTX crash made them look 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 experienced many dips over the years. And every time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke 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. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for individuals to purchase and store crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like real estate or stock 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 higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a means of payment, this will make it more convenient for customers to utilize and store crypto, which could increase demand and price.
So, will crypto grow in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long haul patience and discipline is crucial.