It’s been a rough experience for the crypto market in 2022. As of November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down and down, the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just 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 it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a means of payment, this will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long run Being patient and disciplined is crucial.