It’s been a tough experience for the crypto market in 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash made them look even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. And this growing use case can lead to increasing participation in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase, it will become easier for individuals to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this makes it easier for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise 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. If you’re looking to invest for the long run Being patient and disciplined is crucial.