It’s been a rough 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. Just when the market was getting worse and down, the FTX crash made them look even 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 experienced many drops in the past. Each time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
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 overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. As more and more people become aware of 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 continues to mature as more and more people are starting to learn about and understand it. As the awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services created upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to explore crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify 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, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a means of payment, this makes it easier for people to utilize and store crypto, which can increase demand and price.
So, will crypto grow in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re committed to the long run, being patient and disciplined will be key.