It’s been a tough journey for the cryptocurrency market in 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. When things were getting worse, the FTX crash turned things even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase, it will become easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, it makes it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long-term patience and discipline is crucial.