It’s been a difficult journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. And every time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow, it will become easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
In the event that more retailers start accepting crypto as a form of payment, this will make it easier for consumers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long run, being patient and disciplined is crucial.