It’s been a rough ride for the crypto market until 2022. In November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. When things were looking down and down, the FTX crash turned things more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people being involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. As more and more people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be easier for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, or 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 issued and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more merchants begin accepting crypto as a form of payment, it makes it easier for people to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long run Being patient and disciplined will be key.