It’s been a difficult experience for the crypto market in 2022. As of November the market had dropped by 70% from its previous peak at the end of November. When things were going downhill, the FTX crash turned things 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 drops in the past. Every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record high of $68,000 in 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 in the past, dips are usually followed by a long bull run that eventually surpasses 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
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in 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, or individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate it. As awareness and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a means of payment, this makes it easier for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term, being patient and disciplined is essential.