It’s been a tough journey for the cryptocurrency market through 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things 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 seen its fair share of dips in the past. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as real estate or stock is a fast-growing area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a means of payment, it makes it easier for customers to use and hold cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long haul patience and discipline is crucial.