It’s been a difficult ride for the crypto market through 2022. In November the market was down by more than 70 percent from its previous high in November 2021. When things were getting worse, the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
As the crypto market grows, governments around the world are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people are educated about 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 is maturing increasing numbers of people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an emerging 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 result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a form of payment, it will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will have a rebound by 2023. For those in it for the long-term, being patient and disciplined is essential.