It’s been a tough journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from the previous high in November 2021. When things were looking down, the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. And every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the 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 after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also 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 companies and industries embracing it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. In the future, as more everyday people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to explore crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants accept crypto as a form of payment, it will make it easier for consumers to use and hold crypto, which can increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined will be key.