It’s been a difficult journey for the cryptocurrency market through 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. When things were going downhill after 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 in the past. And every time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017 it broke that record and reached a new high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created 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 and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and lead to more expensive prices.
As the market for crypto is maturing 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 boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing 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 are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned investments, are starting to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a means of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul Being patient and disciplined is crucial.