It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by more than 70 percent from the previous high on November 20, 2021. When things were going downhill after the FTX crash turned things even worse. 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 experienced its fair share of drops in the past. Each time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in many ways. This growing demand could result in more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. As more and more people are educated about crypto and how to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to look at crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting crypto as a form of payment, it will make it more convenient for people to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will have a rebound by 2023. And for those who are in it for the long-term, being patient and disciplined is crucial.