It’s been a tough experience for the crypto market in 2022. As of November the market had dropped by 70 percent from the previous high on November 20, 2021. When things were getting worse and down, the FTX crash turned them 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 had its fair share of drops in the past. Every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. In 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident 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 adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. In the future, as more everyday people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could increase demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase it will be more convenient for people to buy and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses accept crypto as a form of payment, it will make it easier for people to utilize and store crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long-term Being patient and disciplined is essential.