It’s been a rough experience for the crypto market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. And just when things were going downhill, 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 cryptocurrency market, specifically Bitcoin has experienced many dips in the past. And every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017, it broke that record, and hit a new high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. 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 in the past, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to more people being involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and could lead to greater prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
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 cryptocurrency assets will continue to increase. This could lead to more adoption 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 beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased 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 beginning to invest in the crypto market. In the future, as more people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase, it will become easier for individuals to purchase and store crypto, which could boost demand and increase prices.
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 a rapidly growing area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a means of payment, this will make it more convenient for people to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long run, being patient and disciplined is crucial.