It’s been a tough ride for the crypto market through 2022. In November the market was down by 70% from its previous peak at the end of November. When things were getting worse after the FTX crash turned them 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 many dips over the years. Every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke the record and hit a record high of $19,600. Then, 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 had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Government regulations
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 as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. As more and more everyday people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can raise prices.
erd crypto price
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its capability to perform 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.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow it will be more convenient for people to buy and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more merchants accept crypto as a form of payment, this makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could see a recovery in 2023. For those in it for the long run, being patient and disciplined will be key.