It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse after the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back with a big rise.
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 that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us 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 tend to be followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and result in higher prices.
Regulations of the government
As the crypto market 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 acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go 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. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and the best ways 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 crypto market grows as more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to look at 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 main advantages of crypto is its capability to perform fast and cheap 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 prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase it will be more convenient for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a means of payment, this will make it easier for customers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market could see a recovery in 2023. And for those who are in it for the long-term patience and discipline is crucial.