It’s been a tough experience for the crypto market in 2022. By November the market was down by 70 percent from its previous high in November 2021. When things were getting worse after the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke that resistance and hit a new high of $68,000 in November 2021. 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
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people being involved in the market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in greater prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an emerging 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 increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s increase it will be more convenient for consumers to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers accept cryptocurrency as a method of payment, it will make it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long run Being patient and disciplined is essential.