It’s been a tough ride for the crypto market through 2022. As of November, the market had dipped by 70% from its previous peak at the end of November. When things were looking down, the FTX crash turned things more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Each time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. 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
As we’ve seen in the past, dips are usually followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Use of crypto for payment across borders
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 begin to use crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses begin accepting crypto as a means of payment, this will make it more convenient for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market could see a recovery in 2023. And for those who are committed to the long haul Being patient and disciplined is essential.