It’s been a difficult journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was looking down after the FTX crash made them look 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 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 a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. This growing demand could result in increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and could lead to more expensive prices.
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. As more and more people are educated about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be more convenient for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this will make it more convenient for consumers to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will have a rebound by 2023. And for those who are in it for the long haul patience and discipline is essential.