It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market was down by more than 70% from its previous peak in November 2021. And just when things were getting worse after the FTX crash turned things worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows 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 before, fall-offs are typically followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case could lead to increasing participation in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of 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 increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are starting to learn about and appreciate it. As awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more retailers accept crypto as a means of payment, this will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long-term Being patient and disciplined is crucial.