It’s been a tough experience for the crypto market in 2022. As of November, the market had dipped by 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. And every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. This growing demand could lead to increasing participation in the market which could increase the price.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are starting to learn about and appreciate the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services built upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in 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 thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, it will make it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long haul Being patient and disciplined is essential.