It’s been a difficult experience for the crypto market in 2022. By November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. Just when the market was looking down after 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 market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, 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, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could result in more people getting involved in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing 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 bring more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are 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 lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. With increasing numbers of people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
what is liquid staking in crypto
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to explore crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, this will make it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re looking to invest for the long run, being patient and disciplined is crucial.