It’s been a difficult ride for the crypto market through 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was looking down after the FTX crash turned things more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. And every time, it’s rebounded with a huge 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. However, in 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven 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 tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
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 get involved in the market for crypto. As more and more everyday people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about and appreciate it. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a means of payment, this will make it more convenient for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long-term patience and discipline will be key.