It’s been a difficult ride for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were getting worse after the FTX crash made them look 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 dips in the past. And every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017 it broke that record, and hit a new 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 record highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just 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 businesses and industries taking to the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more everyday people learn 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 cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and store 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 in an asset like real estate or stock, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a means of payment, this will make it more convenient for people to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market could have a rebound by 2023. And for those who are looking to invest for the long-term Being patient and disciplined is crucial.