It’s been a tough ride for the crypto market in 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was going downhill and down, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. And every time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers start accepting crypto as a means of payment, it makes it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is crucial.