It’s been a difficult ride for the crypto market through 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were looking down after the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. And every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. In 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could result in increasing participation in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency 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.
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 appreciate it. As understanding and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that 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 the provision of financial services developed using blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a means of payment, this will make it easier for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re committed to the long haul, being patient and disciplined is crucial.