It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse, the FTX crash made them look even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. And every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017, it broke the record and hit a record record high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run that finally overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and more expensive 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 lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, it makes it easier for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could see a recovery in 2023. For those committed to the long-term patience and discipline is crucial.