It’s been a tough ride for the crypto market until 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. Just when the market was getting worse, the FTX crash made them look even 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 drops in the past. Every time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. 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. But history shows us 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 tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could lead to increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to 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 offers a variety of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to participate 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.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services built upon blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses accept crypto as a means of payment, it will make it more convenient for customers to hold and use crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long run patience and discipline is crucial.