It’s been a difficult ride for the crypto market in 2022. In November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse 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 market for crypto, particularly Bitcoin has experienced many dips over the years. And every time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record highest of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and lead to higher prices.
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in 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 created and traded, it could result in a rise in demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers accept crypto as a form of payment, this 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? It’s only time to find out. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long haul patience and discipline is essential.