It’s been a rough journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from its previous high at the end of November. And just when things were going downhill, the FTX crash made them look worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Each time, it has bounced back with a big rally.
For instance, 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 high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. Then, 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
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant 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 investments like cryptocurrency and gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the crypto market. With increasing numbers of people are educated about 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 grows, more and more people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
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 funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for consumers to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a form of payment, it will make it easier for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is essential.