It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by 70 percent from the previous high at the end of November. When things were looking down after the FTX crash made them look worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it’s rebounded with a big rise.
For instance, in 2013, 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 record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. And this growing use case can lead to more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase, it will become easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting crypto as a form of payment, this will make it easier for people to use and hold cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could have a rebound by 2023. For those looking to invest for the long run Being patient and disciplined will be key.