It’s been a difficult experience for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was getting worse after the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. And every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen 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 usually followed by a long bull run that finally breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to greater prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, it makes it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long run, being patient and disciplined is essential.