It’s been a rough experience for the crypto market until 2022. By November the market had dropped by more than 70 percent from its previous high at the end of November. Just when the market was getting worse after the FTX crash made them look even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017, it broke that record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen 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 usually followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in 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 businesses and industries embracing it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people getting involved in the crypto market which could increase the price.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing 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 starting to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to look at crypto as a potential 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 international payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for individuals to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
In the event that more businesses accept crypto as a form of payment, this will make it easier for consumers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long run patience and discipline is crucial.