It’s been a difficult experience for the crypto market until 2022. As of November the market had dropped by 70 percent from the previous high on November 20, 2021. When things were getting worse after the FTX crash turned things more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. And every time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for 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 beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be 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 state-owned investments, are beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
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 crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long run, being patient and disciplined is crucial.