It’s been a rough journey for the cryptocurrency market through 2022. By November the market had dropped by 70% from its previous peak at the end of November. When things were getting worse after the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could lead to more people being involved in the market and, in turn, increase the price.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of crypto grows, it will lead to more 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 that allows finance services built using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly 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 thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.