It’s been a tough experience for the crypto market until 2022. As of November the market was down by 70% from its previous peak at the end of November. When things were getting worse and down, the FTX crash turned them 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 its fair share of drops in the past. Each time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then 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. Then, in 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. 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 tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds 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 more expensive prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over 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 is the basis of many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. With increasing numbers of people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency 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 that accept crypto continue to increase it will be easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers start accepting crypto as a form of payment, it will make it easier for consumers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined is essential.