It’s been a tough experience for the crypto market in 2022. By November, the market had dipped by 70% from its previous peak at the end of November. And just when things were going downhill after the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Each time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017, it broke the record and hit a record 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 high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people getting involved in the market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and lead to greater prices.
Government regulations
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more people are educated about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to learn about and understand it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to use and hold crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long haul, being patient and disciplined is essential.