It’s been a difficult experience for the crypto market in 2022. As of November, the market had dipped by more than 70% from its previous peak on November 20, 2021. Just when the market was looking down and down, the FTX crash turned things even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be created using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a means of payment, it makes it easier for consumers to use and hold crypto, which could drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term Being patient and disciplined is crucial.