It’s been a tough experience for the crypto market in 2022. As of November the market had dropped by 70% from its previous peak at the end of November. And just when things were going downhill after the FTX crash turned them even more dire. 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 dips over the years. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could result in 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 cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, it will make it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long haul, being patient and disciplined will be key.