It’s been a tough journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. Just when the market was going downhill, the FTX crash made them look even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. And every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that after 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 long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand can lead to increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and result in more expensive prices.
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. In the future, as more people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about and understand it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to explore crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to make 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 crypto ATM’s increase it will be easier for people to buy and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are 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, this can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses accept crypto as a means of payment, it will make it more convenient for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long run Being patient and disciplined is essential.