It’s been a rough journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. When things were going downhill after the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged 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 recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto could result in increasing participation in the crypto market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on 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 cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase it will be more convenient for individuals to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a means of payment, it will make it easier for people to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long run Being patient and disciplined is crucial.