It’s been a rough experience for the crypto market until 2022. By November, the market had dipped by 70% from its previous peak at the end of November. When things were getting worse after the FTX crash made them look worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could result in increasing participation in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the market for crypto. In the future, as more people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to show interest in crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses start accepting cryptocurrency as a method of payment, it will make it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re committed to the long run Being patient and disciplined is essential.