It’s been a rough ride for the crypto market until 2022. As of November, the market had dipped by 70% from its previous peak at the end of November. Just when the market was going downhill after the FTX crash turned them more dire. 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 drops in the past. Each time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This 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 the last few years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services built using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto 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 crypto ATM’s continue to increase it will be more convenient for individuals to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses begin accepting crypto as a form of payment, it will make it more convenient for people to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. If you’re committed to the long haul, being patient and disciplined is crucial.