It’s been a rough journey for the cryptocurrency market through 2022. By November the market had dropped by more than 70 percent from its previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash turned them worse. 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 bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
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 taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
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 it. As the awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a means of payment. This could result in 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 owned by the state as instruments for investing, are beginning to explore crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this will make it easier for consumers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long run, being patient and disciplined will be key.