It’s been a rough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70 percent from its 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 be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record highest of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a means of payment, it makes it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re looking to invest for the long-term Being patient and disciplined is essential.