It’s been a tough ride for the crypto market until 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. Just when the market was looking down after the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created using blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses 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.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to show interest in crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase it will be more convenient for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept crypto as a form of payment, it will make it easier for consumers to utilize and store crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long run, being patient and disciplined is essential.