It’s been a tough experience for the crypto market through 2022. As of November the market had dropped by 70 percent from the previous high in November 2021. And just when things were getting worse, the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. As more and more people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could lead to increased demand and increased prices.
Use of crypto for international payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be more convenient for people to buy and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, this makes it easier for people to use and hold crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long run, being patient and disciplined will be key.