It’s been a tough journey for the cryptocurrency market until 2022. In November the market had dropped by 70 percent from the previous high at the end of November. Just when the market was looking down after the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. 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. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had 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
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case could lead to increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and result in greater prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. With increasing numbers of people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
bearish in crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services built on top of blockchain technology. As DeFi grows and more platforms and projects 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 accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to show interest in 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 more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase, it will become easier for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more businesses accept crypto as a means of payment, it makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined will be key.