It’s been a rough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. When things were looking down after the FTX crash made them look even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many drops in the past. And every time, it has bounced back with a big increase.
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 record highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in many ways. This growing demand could lead to more people being involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be 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 now beginning to explore crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and store 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, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses accept crypto as a means of payment, it makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. For those in it for the long run Being patient and disciplined will be key.