It’s been a tough ride for the crypto market in 2022. By November, the market had dipped by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash turned things worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, 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 benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. In the future, as more everyday people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use crypto 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 that accept crypto continue to increase it will be easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants accept cryptocurrency as a method of payment, it will make it easier for consumers to hold and use crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined is crucial.