It’s been a tough journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from its previous high on November 20, 2021. And just when things were getting worse after the FTX crash made them look 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 experienced many drops in the past. Every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017 it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. 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 could lead to more expensive prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting 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 crypto. Retail investors, or individual investors are also beginning to participate in the crypto market. With increasing numbers of people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
capital one crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this could lead to 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 cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a means of payment, this will make it easier for consumers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long run patience and discipline is essential.