It’s been a tough journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was getting worse after the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Each time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen 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 before, fall-offs tend to be followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could result in increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
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 could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are starting to learn about and understand it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount 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.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses accept cryptocurrency as a method of payment, this will make it more convenient for consumers to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. For those committed to the long-term, being patient and disciplined will be key.