It’s been a rough journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from the previous high at the end of November. And just when things were looking down, the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Each time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017 it broke that record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in many ways. This growing demand can lead to increasing participation in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more everyday people learn about cryptocurrency and investing 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 crypto
As the crypto market grows as more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of 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 result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for consumers to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a form of payment, it will make it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined is crucial.