It’s been a tough ride for the crypto market through 2022. In November the market was down by 70% from its previous peak on November 20, 2021. When things were going downhill, the FTX crash turned them more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. And every time, it’s rebounded 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. However, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people getting involved in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services developed using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for individuals to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a form of payment, this makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long haul patience and discipline is essential.