It’s been a difficult journey for the cryptocurrency market until 2022. By November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse after the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Each time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, history has shown 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 previously, dips are typically followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are beginning 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
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. With increasing numbers of everyday people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Use of crypto for cross-border 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 crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for people to buy and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a means of payment, this will make it more convenient for consumers to utilize and store crypto, which could increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market could be able to see a rebound in 2023. For those in it for the long run, being patient and disciplined is crucial.