It’s been a difficult ride for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high on November 20, 2021. When things were getting worse after the FTX crash made them look worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more everyday people become aware of 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 crypto
As the market for crypto grows, more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses accept cryptocurrency as a method of payment, this will make it easier for people to utilize and store crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long-term patience and discipline is essential.