It’s been a tough experience for the crypto market through 2022. By November the market was down by more than 70% from its previous peak at the end of November. Just when the market was going downhill, the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. And every time, it’s rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every 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 surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
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 adopting it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could result in increasing participation in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range 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 make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the market for crypto. As more and more everyday people learn about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services built using blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers start accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. For those in it for the long haul Being patient and disciplined will be key.