It’s been a difficult ride for the crypto market until 2022. By November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was going downhill and down, the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Each time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that 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 cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be 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 higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers accept cryptocurrency as a method of payment, this will make it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long-term patience and discipline is crucial.