It’s been a difficult journey for the cryptocurrency market in 2022. By November the market was down by 70 percent from its previous high in November 2021. Just when the market was getting worse, the FTX crash made them look more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. And every time, it has bounced back with a huge increase.
For example, 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 highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. As more and more people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for individuals to purchase and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long-term Being patient and disciplined will be key.