It’s been a difficult ride for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high at the end of November. When things were looking down after 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 had its fair share of dips in the past. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, 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 pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of people become aware of crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows, 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 buying as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, it will make it more convenient for consumers to use and hold crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market will be able to see a rebound in 2023. For those committed to the long-term Being patient and disciplined is crucial.