It’s been a tough journey for the cryptocurrency market until 2022. By November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were going downhill after the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many 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 lead to higher prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more people learn about crypto and how to invest 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 market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can 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 real estate or stock is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers accept crypto as a form of payment, this makes it easier for consumers to hold and use crypto, which could increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those committed to the long-term patience and discipline is essential.