It’s been a rough journey for the cryptocurrency market in 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. When things were looking down, the FTX crash turned things 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 over the years. And every time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. 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
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are beginning 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 people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the crypto market. As more and more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of crypto grows, it will lead to more people buying and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to look at crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stock or real estate is a fast-growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a form of payment, this will make it more convenient for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined will be key.