It’s been a rough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse and down, the FTX crash turned them even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many drops in the past. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could lead to more people being involved in the market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable rules for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are starting to learn about it and comprehend it. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased 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 become easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a form of payment, this makes it easier for people to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re looking to invest for the long run, being patient and disciplined is crucial.