It’s been a tough experience for the crypto market in 2022. As of November the market had dropped by more than 70 percent from its previous high at the end of November. And just when things were getting worse, the FTX crash turned things more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. Each time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that after 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, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could result in more people getting involved in the crypto market which could boost prices.
The rise in interest of institutions in crypto
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 now exploring the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of 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 advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more everyday people become aware of crypto and how 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 market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to explore 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 increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a form of payment, it makes it easier for people to hold and use crypto, which could increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long haul Being patient and disciplined will be key.