It’s been a difficult experience for the crypto market until 2022. By November the market was down by more than 70 percent from the previous high on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. And every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. The increased interest of 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 and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking 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 higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people become aware of crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created on top of blockchain technology. As DeFi continues to grow 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 continues to grow, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to look at crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
In the event that more retailers accept crypto as a means of payment, it will make it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul Being patient and disciplined is crucial.