It’s been a rough ride for the crypto market in 2022. In November the market was down by 70 percent from its previous high in November 2021. Just when the market was looking down, the FTX crash turned them 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’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people being involved in the market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and more expensive 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 and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for individuals to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this makes it easier for customers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long run, being patient and disciplined is essential.