It’s been a rough journey for the cryptocurrency market in 2022. As of November, the market had dipped by 70% from its previous peak 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 cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. And every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain and 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 beginning to invest in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase, it will become easier for consumers to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting cryptocurrency as a method of payment, it makes it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long haul patience and discipline is essential.