It’s been a rough journey for the cryptocurrency market through 2022. In November the market was down by more than 70 percent from its previous high in November 2021. When things were looking down and down, the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting 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 is maturing as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased 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 be more convenient for individuals to purchase and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more businesses accept crypto as a form of payment, it will make it more convenient for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market will see a recovery in 2023. And for those who are in it for the long haul, being patient and disciplined is essential.