It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Every time, it’s rebounded with a huge increase.
For example, in 2013, 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 the record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be easier for people to buy and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept cryptocurrency as a method of payment, this will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long run Being patient and disciplined is essential.