It’s been a tough ride for the crypto market in 2022. By November, the market had dipped by 70% from its previous peak at the end of November. When things were going downhill, the FTX crash turned them even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. And every time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a means of payment, this will make it more convenient for customers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long haul, being patient and disciplined is crucial.