It’s been a difficult journey for the cryptocurrency market in 2022. In November the market had dropped by 70 percent from the previous high at the end of November. And just when things were getting worse, the FTX crash made them look 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 many dips in the past. Every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017 it broke that record and reached a new high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. And this growing use case could lead to increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. With increasing numbers of people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be created on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses 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 crypto ATM’s increase it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher rates for the crypto.
More adoption by merchants
In the event that more retailers accept crypto as a form of payment, it will make it easier for customers to hold and use crypto, which can increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long-term, being patient and disciplined will be key.