It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill after the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. And every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. And 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 previously, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase 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 that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more everyday people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses accept cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which could drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul patience and discipline will be key.