It’s been a difficult ride for the crypto market through 2022. In November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down and down, the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long 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
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the market which could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors many 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 increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and understand it. As awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could increase prices.
crypto and privacy village
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to look at crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for people to buy and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a form of payment, this will make it easier for people to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market will have a rebound by 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.