It’s been a difficult experience for the crypto market in 2022. As of November, the market had dipped by 70 percent from its previous high in November 2021. When things were looking down after the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Each time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually overcomes the resistance set 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
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries adopting it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like gold and crypto. As the global economic situation is uncertain it could result in increased demand for crypto and higher 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 get involved in the crypto market. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase, it will become easier for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, this makes it easier for consumers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline is essential.