It’s been a rough ride for the crypto market in 2022. In November, the market had dipped by 70% from its previous peak at the end of November. When things were looking down and down, the FTX crash turned them more dire. 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 experienced many dips in the past. Every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017, it broke the record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. 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 surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
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 growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to increasing participation in the market and, in turn, increase the price.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more everyday people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long haul patience and discipline is crucial.