It’s been a rough journey for the cryptocurrency market in 2022. In November, the market had dipped by more than 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 its fair share of dips in the past. Each time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven 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 before, fall-offs are usually followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in more than 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 more companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. And this growing use case can lead to more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of crypto and the best ways 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 market for crypto is maturing, more and more people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto 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 increase it will be easier for individuals to purchase and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers start accepting cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long-term patience and discipline is crucial.