It’s been a difficult ride for the crypto market through 2022. By November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. When things were going downhill and down, the FTX crash made them look worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case can lead to more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a method 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 government-owned investments, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be more convenient for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, it makes it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long-term Being patient and disciplined is crucial.