It’s been a tough experience for the crypto market until 2022. In November the market was down by 70 percent from the previous high in November 2021. Just when the market was going downhill after the FTX crash made them look even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. And every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in many ways. This growing demand could result in increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. With increasing numbers of everyday people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are beginning to look at crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and increased 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 businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase it will be easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a means of payment, it will make it more convenient for consumers to utilize and store 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 see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline is essential.