It’s been a difficult ride for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high at the end of November. And just when things were going downhill, the FTX crash made them look more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run that finally surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in 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 taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. This growing demand can lead to increasing participation in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to 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 and other factors, more and more investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a means of payment, this makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long run, being patient and disciplined is essential.