It’s been a tough journey for the cryptocurrency market through 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were looking down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Every time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen 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 in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over 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 the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. In the future, as more everyday people learn about 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 cryptocurrency
As the crypto market is maturing as more and more people are beginning to become aware about and understand the concept. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be created using blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow, it will become easier for people to buy and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants begin accepting crypto as a means of payment, it makes it easier for customers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re committed to the long-term, being patient and disciplined is essential.