It’s been a rough journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from the previous high in November 2021. When things were looking down and down, the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. 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
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to increasing participation in the market which could drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the crypto market continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses accept crypto as a means of payment, it will make it more convenient for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long run, being patient and disciplined is essential.