It’s been a rough journey for the cryptocurrency market until 2022. As of November the market had dropped by 70% from its previous peak in November 2021. Just when the market was getting worse and down, the FTX crash made them look more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven 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 before, fall-offs are typically followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and higher 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 beginning to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate it. As awareness and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a form of payment, it will make it easier for people to hold and use crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re committed to the long run patience and discipline will be key.