It’s been a tough journey for the cryptocurrency market in 2022. As of November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each 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 that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive 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 market for crypto. As more and more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people buying or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased the demand for it and a rise in 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 increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this makes it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. For those in it for the long run patience and discipline is crucial.