It’s been a tough experience for the crypto market through 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were going downhill after the FTX crash turned things even worse. 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’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in many ways. And this growing use case could lead to more people being involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in higher prices.
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in crypto.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
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 participate in the cryptocurrency market. As more and more people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could increase demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting cryptocurrency as a method of payment, it will make it easier for consumers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long haul Being patient and disciplined is crucial.