It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from its previous high in November 2021. When things were going downhill, the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. Each time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in many ways. The growing popularity of crypto could result in more people being involved in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people are educated about crypto and how 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 crypto market continues to mature, more and more people are beginning to learn about and understand it. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables 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 more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it 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 its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for people to buy and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like real estate or stock is a fast-growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept crypto as a means of payment, this will make it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market will have a rebound by 2023. For those looking to invest for the long haul patience and discipline will be key.