It’s been a tough ride for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were going downhill, 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 market for crypto, particularly Bitcoin, has seen many drops in the past. Each time, it’s rebounded with a big rise.
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 that record and hit a record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people getting involved in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase, it will become easier for people to buy and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, this makes it easier for people to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. For those committed to the long haul patience and discipline is crucial.