It’s been a difficult ride for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high on November 20, 2021. And just when things were going downhill and down, the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. Every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could result in more people being involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Government regulations
As the market for crypto continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance grows of crypto, it will lead to more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services built using blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to show interest in crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow it will be more convenient for people to buy and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand and higher rates for the crypto.
More adoption by merchants
In the event that more retailers accept crypto as a form of payment, it makes it easier for consumers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market will see a recovery in 2023. For those committed to the long run patience and discipline is crucial.