It’s been a rough ride for the crypto market in 2022. As of November, the market had dipped by 70 percent from the previous high at the end of November. When things were getting worse after the FTX crash made them look even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a prolonged bull run that finally 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 and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more people learn about crypto and how to invest 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 it and comprehend the concept. As understanding and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept cryptocurrency as a method of payment, this will make it easier for consumers to hold and use crypto, which can increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re committed to the long haul patience and discipline is crucial.