It’s been a rough experience for the crypto market until 2022. In November, the market had dipped by 70% from its previous peak at the end of November. Just when the market was going downhill and down, the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. And every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also 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 embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology. This could 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 like security and scalability, potential of crypto assets will grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like gold and crypto. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. As more and more everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to show interest in crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, it could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase, it will become easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a means of payment, it will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline will be key.