It’s been a tough experience for the crypto market in 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. When things were looking down, the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Each time, it’s rebounded by a massive rally.
For instance, 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 that record and hit a record record high of $19,600. Fast forward to 2018, the price was 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 seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.