It’s been a rough experience for the crypto market in 2022. As of November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was looking down after the FTX crash turned things 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 experienced many drops in the past. Every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke 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 after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that could increase prices.
rail node crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects come online, this 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 beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning 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 cross-border payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses 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.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to 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 created and traded, it could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a means of payment, this will make it more convenient for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long-term, being patient and disciplined will be key.