It’s been a difficult ride for the crypto market in 2022. In November the market had dropped by 70% from its previous peak in November 2021. And just when things were looking down and down, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Each time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology, which could 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 like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more people are educated about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built 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.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase it will be easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a form of payment, this will make it easier for people to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long-term patience and discipline will be key.