It’s been a rough experience for the crypto market through 2022. As of November the market was down by 70% from its previous peak at the end of November. And just when things were looking down, the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created using blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are starting to look at crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people 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
As the number of ATMs for crypto increase it will be more convenient for people to buy and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a form of payment, it will make it easier for consumers to use and hold crypto, which could increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long-term Being patient and disciplined is essential.