It’s been a tough journey for the cryptocurrency market through 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. Just when the market was getting worse and down, 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 many dips in the past. Every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries adopting it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to more people getting involved in the market, which in turn could increase the price.
A rise in the interest of institutions for 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 possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as 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 cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase it will be easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand and higher prices for crypto.
More adoption by merchants
In the event that more retailers accept crypto as a form of payment, it makes it easier for people to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are committed to the long run Being patient and disciplined is crucial.