It’s been a difficult ride for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high in November 2021. And just when things were going downhill, the FTX crash turned them worse. 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 its fair share of dips over the years. And every time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a 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. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could lead to more people being involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
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 crypto market. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more businesses accept crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re committed to the long-term patience and discipline will be key.