It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market had dropped by 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, the FTX crash made them look worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Each time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had 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
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto can lead to more people being involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains 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 one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built using blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined will be key.