It’s been a rough ride for the crypto market in 2022. By November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash made them look 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. Every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017, it broke the record and reached a new highest of $19,600. In 2018, 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. Just like that, we’ve had another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From finance to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more everyday people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can drive up prices.
nio crypto stock
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be more convenient for people to buy and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses accept cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long-term patience and discipline will be key.