It’s been a rough ride for the crypto market in 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash made them look worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, this makes it easier for consumers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could have a rebound by 2023. And for those who are in it for the long run Being patient and disciplined is essential.