It’s been a rough experience for the crypto market until 2022. As of November the market was down by more than 70 percent from its previous high on November 20, 2021. When things were looking down after the FTX crash made them look worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually 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
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
Government regulations
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are looking 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.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are beginning to learn about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created using blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and increased 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 method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to show interest in crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a means of payment, this will make it easier for customers to utilize and store crypto, which could increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long-term patience and discipline is essential.