It’s been a difficult ride for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high in November 2021. And just when things were going downhill after the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. Every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to more people getting involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
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 cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is 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 people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. In the future, as more people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature as more and more people are beginning to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
cardax crypto price
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for people to buy and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a form of payment, it will make it easier for customers to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long-term patience and discipline will be key.