It’s been a rough journey for the cryptocurrency market in 2022. In November the market had dropped by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people getting involved 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 curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
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, potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more people are educated about 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 cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to explore crypto as a potential 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 higher prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, it will make it easier for people to use and hold crypto, which can increase demand and price.
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 cryptocurrency market will have a rebound by 2023. For those committed to the long haul Being patient and disciplined is essential.