It’s been a difficult experience for the crypto market in 2022. In November the market was down by more than 70% from its previous peak at the end of November. When things were looking down, the FTX crash made them look worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Each time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. 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
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. This growing demand could result in more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors 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 everyday people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for people to buy and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. For those in it for the long-term patience and discipline is essential.