It’s been a tough ride for the crypto market in 2022. By November, the market had dipped by 70 percent from its previous high in November 2021. Just when the market was going downhill after the FTX crash turned things worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of potential use cases 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, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through 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. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are starting to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, this makes it easier for people to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long haul, being patient and disciplined will be key.