It’s been a rough journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70 percent from its previous high at the end of November. When things were looking down, the FTX crash turned them even more dire. 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 its fair share of dips in the past. Every time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people being involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more everyday people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in increasing numbers of 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 allows financial services to be created upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase it will be more convenient for people to buy and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined is essential.