It’s been a difficult experience for the crypto market in 2022. By November the market was down by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash turned them 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 experienced many dips over the years. Each time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just 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 embracing the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved 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 curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Government regulations
As the crypto market continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. 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
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are starting to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of 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, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, this will make it easier for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long run Being patient and disciplined is crucial.