It’s been a rough ride for the crypto market through 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. 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 cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Each time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people getting involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. With increasing numbers of people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about it and comprehend it. As the awareness 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 area that is rapidly expanding in the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to explore crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting crypto as a means of payment, it makes it easier for customers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.