It’s been a difficult experience for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was going downhill after the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Each time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than 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 companies and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. This growing demand could result in more people being involved in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can raise 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 lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers accept crypto as a means of payment, this will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market could see a recovery in 2023. For those in it for the long-term, being patient and disciplined is crucial.