It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was looking down after the FTX crash made them look even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Each time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke 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 following each 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 prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to explore crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a means of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined is essential.