It’s been a rough experience for the crypto market until 2022. In November the market had dropped by 70% from its previous peak on November 20, 2021. When things were looking down after the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every 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, which eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. This growing demand could result in more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is 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 people who are interested in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about and understand the concept. 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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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting 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.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a means of payment, this makes it easier for people to utilize and store crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. For those committed to the long-term Being patient and disciplined is essential.