It’s been a tough experience for the crypto market until 2022. In November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. When things were looking down after the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
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 participate in the cryptocurrency market. As more and more people are educated about crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting cryptocurrency as a method of payment, it will make it easier for people to hold and use crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market will have a rebound by 2023. And for those who are in it for the long haul patience and discipline is essential.