It’s been a difficult ride for the crypto market in 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was going downhill and down, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. And every time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies 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. And this growing use case could lead to more people getting involved in the market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond 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. This will drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will expand. This could result in more acceptance 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 starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about and appreciate the concept. As awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to show interest in crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
As more and more merchants begin accepting crypto as a means of payment, it will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long-term Being patient and disciplined is crucial.