It’s been a difficult journey for the cryptocurrency market in 2022. By November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash made them look 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 over the years. And every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, 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 make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. As more and more everyday people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could increase prices.
valora crypto price
Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to explore crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, it makes it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long haul Being patient and disciplined will be key.