It’s been a difficult ride for the crypto market in 2022. As of November the market was down by more than 70 percent from its previous high at the end of November. Just when the market was looking down after the FTX crash turned them worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. And every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record high 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 in the past, 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 in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to more people getting involved in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased 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 starting to get involved in the market for crypto. As more and more people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this can increase prices.
baby dot crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher prices for crypto.
More adoption by merchants
As more and more businesses begin accepting crypto as a form of payment, this makes it easier for people to utilize and store crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long run patience and discipline is essential.