It’s been a difficult journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and lead to higher prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the market for crypto. With increasing numbers of 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 market for crypto is maturing increasing numbers of people are beginning to become aware about and understand the concept. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built using blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to look at crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to increase, it will become easier for consumers to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this makes it easier for consumers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long haul patience and discipline is crucial.