It’s been a tough experience for the crypto market in 2022. In November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash made them look worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many drops in the past. And every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 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. Just like that, we’ve had another dip. However, history has shown us 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 before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher 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. As more and more people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, this could 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 that enables finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap 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
With the amount of crypto ATM’s increase it will be easier for individuals to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting crypto as a means of payment, this makes it easier for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. For those in it for the long-term, being patient and disciplined is crucial.