It’s been a tough journey for the cryptocurrency market until 2022. As of November the market was down by more than 70 percent from the previous high in November 2021. Just when the market was looking down, the FTX crash made them look worse. 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. Every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of 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 and more industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investments, are starting to show interest in crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a form of payment, this will make it easier for people to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will have a rebound by 2023. For those looking to invest for the long run, being patient and disciplined is essential.