It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. And every time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us 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 prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. This growing demand can lead to more people being involved in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. As more and more people learn about crypto and the best ways 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 grows, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows it could result in more people buying or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, this makes it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re looking to invest for the long-term patience and discipline will be key.