It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. When things were going downhill, the FTX crash turned them even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also 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 embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for 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 now exploring the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and result in greater prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography 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 expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize 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
The number of ATMs for crypto continue to increase, it will become easier for people to buy and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are committed to the long run Being patient and disciplined is crucial.