It’s been a tough experience for the crypto market in 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were going downhill, 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 dips in the past. Each time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. As more and more people become aware of crypto and how to invest in it, this could lead to more 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 and understand it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to explore crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for consumers to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a means of payment, it will make it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is crucial.