It’s been a tough ride for the crypto market in 2022. In November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was going downhill after 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 drops in the past. Each time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in increasing participation in the market which could boost prices.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world 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 cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can increase prices.
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The 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 expands and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to explore crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a means of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run, being patient and disciplined is crucial.