It’s been a tough journey for the cryptocurrency market through 2022. By November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. Just when the market was getting worse and down, the FTX crash made them look worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. Every time, it has bounced back with a huge rally.
For instance, in 2013, 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 that record, and hit a new highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could lead to more people being involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
As the crypto market grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Use of crypto for international payments
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 cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things in mind, 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.