It’s been a tough ride for the crypto market through 2022. In November, the market had dipped by more than 70 percent from its previous high at the end of November. When things were looking down and down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. And every time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than 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 better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could result in increasing participation in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as 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
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to explore crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase, it will become easier for consumers to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a form of payment, this will make it easier for people to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long-term, being patient and disciplined is essential.