It’s been a difficult ride for the crypto market in 2022. By November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash turned things more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. And every time, it’s bounced back by a massive rise.
For example, in 2013, 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 the record and hit a record record high of $19,600. In 2018, the price was at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people getting involved in the market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. As more and more everyday 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 crypto
As the crypto market is maturing as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a form of payment, this will make it easier for customers to use and hold cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market could be able to see a rebound in 2023. For those in it for the long-term patience and discipline will be key.