It’s been a difficult journey for the cryptocurrency market until 2022. In November the market was down by 70% from its previous peak at the end of November. Just when the market was going downhill, the FTX crash turned them worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people being involved in the market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about it and comprehend it. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to explore crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be more convenient for people to buy and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, this will make it more convenient for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long-term Being patient and disciplined is crucial.