It’s been a rough ride for the crypto market through 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse after the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. And every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in increasing participation in the market which could boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
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, potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding 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.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this will make it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long run patience and discipline will be key.