It’s been a tough experience for the crypto market until 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse and down, the FTX crash made them look more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following 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, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to 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 potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which can drive up 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 created using blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers accept cryptocurrency as a method of payment, this will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run Being patient and disciplined will be key.