It’s been a tough ride for the crypto market in 2022. By November the market was down by more than 70 percent from the previous high in November 2021. And just when things were going downhill, the FTX crash made them look worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. Every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors 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 could bring more stability to the crypto market and lead to greater prices.
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of people learn about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be easier for people to buy and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
As more and more merchants begin accepting crypto as a means of payment, this makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will be able to see a rebound in 2023. For those committed to the long-term patience and discipline is essential.