It’s been a tough journey for the cryptocurrency market until 2022. As of November the market was down by 70 percent from its previous high at the end of November. When things were getting worse, the FTX crash made them look even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. Each time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. Then, 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
Just like we’ve seen previously, dips are usually followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants accept cryptocurrency as a method of payment, it makes it easier for consumers to hold and use crypto, which can increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will see a recovery in 2023. If you’re committed to the long-term patience and discipline will be key.