It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was going downhill after the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Each time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new 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 at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. As more and more everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase it will be more convenient for people to buy and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long haul Being patient and disciplined is essential.