It’s been a rough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. Just when the market was going downhill, the FTX crash made them look even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. In 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through the resistance and reached a new high 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 in the past, dips are typically followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
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 cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
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. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about and understand it. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that can increase prices.
what is btr crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize 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.
With the amount of ATMs that accept crypto increase it will be easier for people to buy and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could have a rebound by 2023. For those looking to invest for the long haul Being patient and disciplined is essential.