It’s been a difficult journey for the cryptocurrency market through 2022. By November, the market had dipped by 70% from its previous peak on November 20, 2021. Just when the market was getting worse and down, the FTX crash made them look even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could result in more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more people learn about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals 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.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers accept crypto as a means of payment, this makes it easier for customers to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re committed to the long-term, being patient and disciplined is crucial.