It’s been a tough experience for the crypto market until 2022. In November the market was down by 70 percent from its previous high at the end of November. And just when things were getting worse and down, the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. And every time, it has bounced back with a huge rise.
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. However, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a prolonged bull run, which eventually breaks through 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 progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. In the future, as more people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand it. As the awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built upon 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.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, this makes it easier for people to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline is crucial.