It’s been a tough experience for the crypto market until 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally overcomes the resistance set by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate is 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 one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. In the future, as more everyday people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase it will be more convenient for consumers to purchase and keep crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more merchants begin accepting crypto as a means of payment, this makes it easier for people to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long run, being patient and disciplined is crucial.