It’s been a difficult journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70% from its previous peak at the end of November. When things were going downhill and down, the FTX crash turned them 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 seen many drops in the past. And every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to explore crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a means of payment, this will make it more convenient for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run Being patient and disciplined is essential.