It’s been a difficult journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. Just when the market was looking down, the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could lead to increasing participation in the market which could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a means of payment, this makes it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market will have a rebound by 2023. If you’re committed to the long run Being patient and disciplined will be key.