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 at the end of November. When things were looking down, the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many drops in the past. Every time, it’s 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. But, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it 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. 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
As we’ve seen previously, dips are usually followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case could lead to more people getting involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could result in 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 increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. As more and more everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are starting to learn about and understand the concept. As the awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services created using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to show interest in 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 increased prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more businesses begin accepting cryptocurrency as a method of payment, it will make it easier for consumers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects in mind, 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 will be key.