It’s been a difficult experience for the crypto market through 2022. By November the market had dropped by 70 percent from the previous high at the end of November. And just when things were getting worse, the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people being involved in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about and understand it. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
medical chain crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created upon 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.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
As more and more retailers begin accepting crypto as a form of payment, it makes it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. For those committed to the long-term, being patient and disciplined is crucial.