It’s been a tough experience for the crypto market through 2022. By November the market was down by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. And every time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries adopting it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could result in increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and appreciate it. As awareness and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency 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 crypto ATM’s continue to increase it will be easier for consumers to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting crypto as a means of payment, it will make it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long-term Being patient and disciplined will be key.