It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market had dropped by 70 percent from its previous high at the end of November. And just when things were looking down, the FTX crash turned things 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. Every time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. This growing demand could result in more people getting involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as gold and crypto. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to explore crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase, it will become easier for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a means of payment, it makes it easier for people to use and hold crypto, which can boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. If you’re in it for the long run, being patient and disciplined is crucial.