It’s been a tough journey for the cryptocurrency market in 2022. By November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse and down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Every time, it’s rebounded by a massive rally.
For instance, 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 that record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress 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 cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to more people being involved in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. In the future, as more everyday people become aware of cryptocurrency and investing 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 continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
moonstar crypto price
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency 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 crypto ATM’s continue to increase, it will become easier for people to buy and hold crypto, which could drive up demand and prices.
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. As more security tokens are created and traded, this can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a form 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. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long run patience and discipline is essential.