It’s been a difficult experience for the crypto market in 2022. By November, the market had dipped by 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash turned things more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted 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, it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
As the market for crypto grows, governments around the world are starting to create more favorable rules for crypto. This will help draw 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 possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the crypto market. In the future, as more everyday people learn about crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing, more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to explore crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses begin accepting crypto as a form of payment, this makes it easier for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could have a rebound by 2023. For those looking to invest for the long-term patience and discipline is crucial.