It’s been a tough experience for the crypto market until 2022. By November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was going downhill after the FTX crash turned things even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. Each time, it’s bounced back with a big rise.
For example, in 2013, 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 hit a new high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries adopting it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to become aware about and understand it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use 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
The number of crypto ATM’s continue to increase, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more retailers accept crypto as a form of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long-term patience and discipline will be key.