It’s been a tough ride for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high at the end of November. When things were getting worse after 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 experienced its fair share of dips over the years. And every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a long bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules 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 underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be 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
Sovereign wealth funds, which are state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, this makes it easier for people to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those committed to the long-term patience and discipline is crucial.