It’s been a rough ride for the crypto market in 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 going downhill and down, the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, history has shown us that after 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 prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case can lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people are educated 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 market for crypto continues to mature, more and more people are beginning to learn about and understand the concept. 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 a rapidly growing area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to show interest in crypto as a potential 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.
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 individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a form of payment, it makes it easier for consumers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. If you’re committed to the long-term Being patient and disciplined is crucial.