It’s been a rough journey for the cryptocurrency market until 2022. By November, the market had dipped by 70 percent from the previous high in November 2021. Just when the market was looking down and down, the FTX crash made them look 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 experienced its fair share of dips over the years. And every time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people getting involved in the market which could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential 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 crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
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 continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants accept cryptocurrency as a method of payment, this will make it easier for people to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline is essential.