It’s been a difficult journey for the cryptocurrency market in 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were getting worse after the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. And 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 previously, dips are typically followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could lead to increasing participation in the market which could increase the price.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. This increased interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. As more and more people learn about crypto and how to invest 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 crypto market grows, more and more people are starting to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi grows 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 continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular 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 investments, are beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it more convenient for customers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long run Being patient and disciplined is essential.