It’s been a tough journey for the cryptocurrency market through 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. And just when things were looking down, the FTX crash turned things worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Each time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could result in increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions 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 possibilities of crypto assets. The increased interest of institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate is 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 ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to show interest in crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting cryptocurrency as a method of payment, it will make it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. For those committed to the long-term Being patient and disciplined will be key.