It’s been a tough ride for the crypto market through 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were getting worse and down, 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 market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s bounced back with a huge increase.
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. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people getting involved in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. 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 has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created using blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for people to buy and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a form of payment, this makes it easier for consumers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. For those in it for the long-term, being patient and disciplined will be key.