It’s been a tough ride for the crypto market in 2022. In November the market was down by 70 percent from its previous high in November 2021. Just when the market was getting worse after the FTX crash turned them more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run that finally breaks through 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 made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to higher prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This could help attract more investors as well as increase the adoption rate 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. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services created using blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be easier for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, it makes it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long haul, being patient and disciplined is crucial.