It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by 70 percent from the previous high in November 2021. When things were going downhill 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 many drops in the past. Every time, it has bounced back with a big rise.
For example, in 2013, 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 reached a new high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a long bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting it, its usage and acceptance is growing. From banking to gaming, crypto is being used in many ways. And this growing use case could result in more people being involved in the crypto market which could boost prices.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows 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 regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to show interest in crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long haul Being patient and disciplined is crucial.