It’s been a rough ride for the crypto market in 2022. As of November, the market had dipped by 70 percent from the previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. Each time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen in not just 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 companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market 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 rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
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 expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains 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 crypto. Retail investors, or individual investors, are also starting to get involved in the crypto market. In the future, as more everyday people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase it will be more convenient for consumers to purchase and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a form of payment, this makes it easier for customers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long run, being patient and disciplined is essential.