It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by 70% from its previous peak on November 20, 2021. And just when things were looking down, the FTX crash made them look even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Each time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of 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
As we’ve seen in the past, dips are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high 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 made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could result in more people getting involved in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the crypto market. With increasing numbers of people are educated about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a form 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 state-owned investment vehicles, are starting to look at crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for individuals to purchase and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this makes it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long run patience and discipline is crucial.