It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by more than 70 percent from its previous high on November 20, 2021. And just 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 cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing, more and more people are starting to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be 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, more and more companies are starting to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a means of payment, this makes it easier for consumers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined is essential.