It’s been a rough experience for the crypto market in 2022. As of November the market had dropped by 70 percent from the previous high on November 20, 2021. When things were going downhill, the FTX crash turned things more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Every time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in increasing participation in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain and 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 people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to look at crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be easier for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting crypto as a means of payment, it will make it more convenient for customers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. For those in it for the long haul patience and discipline is essential.