It’s been a tough journey for the cryptocurrency market in 2022. By November the market had dropped by more than 70% from its previous peak on November 20, 2021. When things were getting worse and down, 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 experienced many dips in the past. Every time, it’s rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven 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 long bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase it will be easier for people to buy and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a means of payment, it will make it easier for people to hold and use crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul Being patient and disciplined is essential.