It’s been a tough experience for the crypto market through 2022. As of November the market was down by 70 percent from its previous high in November 2021. When things were looking down and 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 had its fair share of dips in the past. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. In 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. As more and more people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive 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 form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to look at crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase it will be more convenient for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a form of payment, it will make it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long-term Being patient and disciplined is essential.