It’s been a tough journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were going downhill after the FTX crash turned them more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also 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 banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could drive the prices up.
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 hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and result in higher prices.
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are starting to look at cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long haul patience and discipline is essential.