It’s been a difficult ride for the crypto market until 2022. In November the market was down by 70% from its previous peak at the end of November. And just when things were getting worse and down, the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. And every time, it’s rebounded with a big rally.
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 record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize 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 advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in 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, also known as individual investors, are also starting to invest in the crypto market. As more and more everyday people learn about 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 crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a means of payment, this will make it more convenient for people to use and hold crypto, which could increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined will be key.