It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse, the FTX crash made them look even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. And every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to increased demand for crypto and 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 market for crypto. As more and more people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created upon blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market 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 usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a form of payment, this will make it easier for people to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long-term patience and discipline is essential.