It’s been a rough experience for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high at the end of November. Just when the market was going downhill after the FTX crash made them look even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. And every time, it’s rebounded 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. In 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could result in increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and result in higher prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services developed upon blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of 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, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, it makes it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long haul Being patient and disciplined is crucial.