It’s been a rough ride for the crypto market through 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. When things were looking down after the FTX crash made them look even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Every time, it’s rebounded with a huge rally.
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 the record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. In the future, as more everyday 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 crypto market continues to mature increasing numbers of people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, it makes it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long run Being patient and disciplined will be key.