It’s been a rough journey for the cryptocurrency market until 2022. By November the market had dropped by 70% from its previous peak on November 20, 2021. And just when things were going downhill and down, the FTX crash turned them even 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 many dips over the years. Every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
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 adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could lead to more people being involved in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more people become aware of 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 cryptocurrency
As the crypto market grows as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to show interest in crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase it will be easier for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a means of payment, this makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market will have a rebound by 2023. For those committed to the long-term Being patient and disciplined is crucial.