It’s been a rough ride 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. And just when things were going downhill after the FTX crash made them look worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows 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 previously, dips tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. As more and more people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be easier for people to buy and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses accept crypto as a form of payment, this will make it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined will be key.