It’s been a rough ride for the crypto market through 2022. As of November the market was down by more than 70 percent from the previous high on November 20, 2021. When things were getting worse, the FTX crash turned them more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a prolonged bull run, which eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. This growing demand could result in increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain it could result in 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, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that could 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 upon blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are government-owned investments, are now beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a means of payment, this will make it more convenient for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long run, being patient and disciplined will be key.