It’s been a tough ride for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than 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, it was trading at $3,100. And in 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand can lead to more people getting involved in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to participate in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and store crypto, which will 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 can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a form of payment, it makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long run, being patient and disciplined is crucial.