It’s been a difficult experience for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash turned them worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. And every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be more convenient for consumers to purchase and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a form of payment, this will make it more convenient for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined is essential.