It’s been a tough experience for the crypto market in 2022. As of November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were looking down 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 had many dips over the years. And every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just 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 companies and industries taking to it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to more people getting involved in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive 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 beginning to participate in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed using blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, it could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in 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 grow it will be more convenient for consumers to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a form of payment, this will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul Being patient and disciplined will be key.