It’s been a difficult experience for the crypto market in 2022. By November, the market had dipped by 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Each time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to more people being involved in the market which could boost prices.
Increased institutional interest in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules 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 is the basis of many cryptocurrency, blockchain, offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, this will make it more convenient for people to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long haul, being patient and disciplined is essential.