It’s been a rough experience for the crypto market through 2022. By November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were looking down, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. And every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. This growing demand could result in more people being involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like 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 rates for the crypto.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a form of payment, it will make it easier for consumers to use and hold crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market will have a rebound by 2023. If you’re committed to the long haul Being patient and disciplined will be key.