It’s been a difficult ride for the crypto market through 2022. By November the market was down by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Every time, it’s rebounded with a huge rise.
For example, 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. In 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. 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 previously, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. This growing demand could result in more people getting involved in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and result in more expensive prices.
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. As more and more people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase, it will become easier for people to buy and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses begin accepting crypto as a form of payment, this will make it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re looking to invest for the long haul Being patient and disciplined will be key.