It’s been a rough journey for the cryptocurrency market until 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that at the end of every dip there’s a bull-run.
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 breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. This growing demand could lead to more people being involved in the crypto market, which in turn could increase the price.
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 and even large corporations are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies 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 companies are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be created using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate is a fast-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 higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants start accepting crypto as a form of payment, it will make it easier for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined is essential.