It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by more than 70 percent from its previous high in November 2021. When things were going downhill, the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. And every time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. But history shows 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 previously, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows 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.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a means of payment, this will make it more convenient for people to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. For those in it for the long run patience and discipline is essential.