It’s been a difficult journey for the cryptocurrency market through 2022. In November, the market had dipped by 70 percent from the previous high at the end of November. Just when the market was getting worse and down, 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 over the years. Every time, it has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low 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 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen 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
Similar to what we’ve witnessed previously, dips are usually followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can 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 witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in more expensive prices.
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can raise prices.
buy silver with crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned investments, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase it will be easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long run, being patient and disciplined is essential.