It’s been a tough experience for the crypto market through 2022. As of November the market had dropped by 70 percent from its previous high in November 2021. When things were going downhill and down, the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. And every time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography 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.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. 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 crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses accept crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which could increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long run Being patient and disciplined is essential.