It’s been a tough experience for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to more people getting involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people learn about crypto and how 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 grows increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more 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 payment across borders
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a form of payment, it will make it more convenient for people to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long-term Being patient and disciplined is crucial.