It’s been a difficult ride for the crypto market through 2022. In November, the market had dipped by 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash turned things 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 seen its fair share of drops in the past. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to increasing participation in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to participate in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this can raise prices.
avex crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for people to buy and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers accept cryptocurrency as a method of payment, it will make it easier for customers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long haul patience and discipline will be key.