It’s been a difficult journey for the cryptocurrency market until 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could result in increasing participation in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in crypto.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like gold and crypto. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. In the future, as more 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 crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for consumers to purchase and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a form of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. And for those who are in it for the long haul, being patient and disciplined will be key.