It’s been a tough ride for the crypto market until 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to more people being involved in the crypto market which could 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, many large institutions are now exploring the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Government regulations
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 mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more people become aware of crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and understand it. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in 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 businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow it will be easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a means of payment, it makes it easier for people to hold and use crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long haul, being patient and disciplined will be key.