It’s been a rough ride for the crypto market in 2022. By November the market was down by 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that following 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 long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in higher prices.
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a method of payment. This could result in increased usage of crypto in daily 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 investments, are beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for people to buy and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, this will make it easier for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those committed to the long run Being patient and disciplined is crucial.