It’s been a tough journey for the cryptocurrency market through 2022. In November, the market had dipped by more than 70 percent from its previous high at the end of November. Just when the market was looking down, the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. 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
As we’ve seen previously, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to look at crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long-term Being patient and disciplined will be key.