It’s been a difficult experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high on November 20, 2021. When things were getting worse, the FTX crash turned things even worse. 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 drops in the past. Every time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could lead to increasing participation in the market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement 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 crypto assets will expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic and 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 higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. In the future, as more people become aware of crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be easier for people to buy and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a form of payment, this will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long-term Being patient and disciplined is crucial.