It’s been a tough ride for the crypto market in 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were looking down, the FTX crash turned them even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had 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
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to more people getting involved in the market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as 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 even individual investors are also beginning to invest in the cryptocurrency market. As more and more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
crypto trading indicators
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for people to buy and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, this will make it easier for consumers to hold and use crypto, which can drive up demand and 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 see a recovery in 2023. If you’re in it for the long-term Being patient and disciplined is crucial.