It’s been a tough experience for the crypto market until 2022. As of November the market was down by more than 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a means of payment, it will make it more convenient for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long run patience and discipline will be key.