It’s been a rough ride for the crypto market through 2022. As of November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned things worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Each time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. 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
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. This growing demand could result in increasing participation in the market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and lead to higher prices.
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Blockchain and cryptocurrency technology is 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 acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s increase it will be more convenient for consumers to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a form of payment, it makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long haul, being patient and disciplined will be key.