It’s been a difficult experience for the crypto market in 2022. In November the market was down by more than 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash turned them more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. And every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips 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 in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and result in higher prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher 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 method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a means of payment, this will make it easier for customers to use and hold crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long-term patience and discipline is crucial.