It’s been a difficult journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. When things were looking down after the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. And every time, it’s bounced back with a huge rise.
In 2013, for instance, 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 hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck that 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 after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to more people being involved in the market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the crypto market. As more and more people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are beginning to become aware about and appreciate it. As awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a means of payment, this will make it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. For those committed to the long haul patience and discipline will be key.