It’s been a tough ride for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. When things were going downhill, the FTX crash made them look worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Each time, it’s rebounded by a massive 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 high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are starting to learn about and understand it. As awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which can drive up prices.
fleek crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow, it will become easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a form of payment, this will make it more convenient for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long run patience and discipline is essential.