It’s been a rough journey for the cryptocurrency market in 2022. As of November, the market had dipped by 70 percent from the previous high at the end of November. And just when things were getting worse and down, the FTX crash turned them 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 had many dips in the past. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current 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 like gold and crypto. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are beginning to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, it will make it more convenient for customers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. For those committed to the long-term Being patient and disciplined is essential.