It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse, the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. 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 in the past, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people learn about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to show interest in crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase it will be easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a means of payment, it will make it more convenient for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long-term patience and discipline will be key.