It’s been a difficult journey for the cryptocurrency market through 2022. By November the market had dropped by more than 70% from its previous peak in November 2021. When things were getting worse, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Every time, it’s bounced back by a massive increase.
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 hit a record highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged 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 made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the crypto market. With increasing numbers of people learn about cryptocurrency and investing 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, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased 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 means 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 investments, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a form of payment, it makes it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long run Being patient and disciplined is essential.