It’s been a rough journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash turned them even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, 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 the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us 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 typically followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in 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 the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people being involved in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to greater prices.
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
In the event that more businesses accept crypto as a form of payment, this will make it more convenient for customers to utilize and store crypto, which could increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul Being patient and disciplined is essential.