It’s been a tough journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from its previous high on November 20, 2021. When things were looking down and down, the FTX crash turned things even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and lead to greater prices.
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to increased 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 even individual investors, are also starting to get involved in the crypto market. As more and more people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting 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
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, it will make it more convenient for people to hold and use crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long-term Being patient and disciplined is essential.