It’s been a tough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. When things were going downhill and down, the FTX crash turned things more dire. What is the likelihood that 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 drops in the past. Each time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that following 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 prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could result in increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising 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 could lead to more expensive 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 crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. As more and more people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a means of payment, this will make it easier for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise 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. And for those who are looking to invest for the long-term Being patient and disciplined will be key.