It’s been a tough ride for the crypto market until 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash made them look even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. Every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy 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. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. As more and more everyday people are educated about 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 as more and more people are beginning to learn about and understand it. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept cryptocurrency as a method of payment, this will make it easier for consumers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long-term patience and discipline is crucial.