It’s been a difficult experience for the crypto market through 2022. In November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill and down, the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that finally overcomes the resistance set by the market’s previous highest 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 come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could lead to more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of 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 increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains 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 crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are beginning to learn about and understand the concept. 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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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to explore crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border 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 it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be more convenient for people to buy and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing 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 thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a form of payment, it will make it easier for customers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long haul Being patient and disciplined is essential.