It’s been a tough journey for the cryptocurrency market through 2022. By November, the market had dipped by 70% from its previous peak on November 20, 2021. When things were looking down, the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. And every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous market’s 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 progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in more people being involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases 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.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could raise 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 could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto 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 owned by the state as investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting cryptocurrency as a method of payment, it will make it easier for customers to use and hold crypto, which can drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline will be key.