It’s been a rough journey for the cryptocurrency market in 2022. In November the market was down by 70% from its previous peak at the end of November. Just when the market was going downhill, the FTX crash turned things 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 drops in the past. Every time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017, it broke the record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case can lead to more people getting involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases 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 benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning 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 greater use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto increase it will be easier for individuals to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a means of payment, this makes it easier for customers to use and hold crypto, which could drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market could have a rebound by 2023. For those in it for the long haul, being patient and disciplined is crucial.