It’s been a tough experience for the crypto market through 2022. As of November the market was down by 70 percent from the previous high in November 2021. And just when things were looking down, 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 seen its fair share of dips over the years. Each time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had 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
Just like we’ve seen before, fall-offs are typically followed by a long bull run that eventually surpasses the resistance created by the market’s previous 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 come a long way in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as higher 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 beginning to participate in the cryptocurrency market. As more and more people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could lead to increased demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses accept crypto as a form of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase 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. If you’re looking to invest for the long haul, being patient and disciplined will be key.