It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by more than 70 percent from its previous high in November 2021. When things were going downhill and down, the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to become aware about and understand it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase, it will become easier for individuals to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting cryptocurrency as a method of payment, it will make it easier for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. For those looking to invest for the long run, being patient and disciplined is essential.