It’s been a difficult journey for the cryptocurrency market in 2022. In November the market was down by more than 70% from its previous peak on November 20, 2021. When things were going downhill, the FTX crash made them look more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record and reached a new high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke that resistance and hit a new high 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 tend to be followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. This growing demand can lead to increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. 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.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to look at crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase it will be more convenient for people to buy and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly 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 consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a means of payment, it will make it easier for customers to use and hold crypto, which could increase demand and price.
So, will crypto increase in 2023? The only way to know is time. With these things to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long run Being patient and disciplined is essential.