It’s been a tough experience for the crypto market through 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. When things were looking down and down, the FTX crash turned things even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. Each time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to more people getting involved in the crypto market which could boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning 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 adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. 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
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, it will make it easier for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market could see a recovery in 2023. For those in it for the long run patience and discipline will be key.