It’s been a difficult experience for the crypto market in 2022. In November the market was down by more than 70% from its previous peak at the end of November. And just when things were looking down, the FTX crash turned things even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Each time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From banking to gaming 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 in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
does crypto com report to irs
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase it will be easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a means of payment, this will make it easier for people to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. 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 patience and discipline is essential.