It’s been a tough journey for the cryptocurrency market in 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. When things were looking down and down, the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Every time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke that record and reached a new highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs 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 cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could result in more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more everyday people learn about cryptocurrency and investing 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 market for crypto grows as more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, this makes it easier for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined is essential.