It’s been a rough experience for the crypto market until 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were looking down after the FTX crash made them look even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. Each time, it’s rebounded 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 that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a lengthy bull run that 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
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 rising. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case can lead to more people getting involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are starting to look 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 higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase it will be easier for people to buy and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this makes it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.