It’s been a tough ride for the crypto market through 2022. In November the market was down by more than 70 percent from the previous high in November 2021. And just when things were getting worse and down, the FTX crash turned them more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. And every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous 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 the use of crypto is increasing in many ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the crypto market. As more and more everyday people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As awareness and acceptance grows of crypto it could result in more people buying 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 that enables the provision of financial services built upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants accept cryptocurrency as a method of payment, it makes it easier for customers to utilize and store crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long-term Being patient and disciplined is essential.