It’s been a difficult journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70% from its previous peak at the end of November. When things were getting worse, the FTX crash turned things more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. And every time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors many investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain and 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, or individual investors, are also starting to participate in the market for crypto. As more and more people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, this makes it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. 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 haul patience and discipline is crucial.