It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were looking down, the FTX crash made them look worse. So, will 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 has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us 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 usually followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From finance to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. As more and more people learn about crypto and the best ways to invest in it, this could lead to 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 starting to learn about it and comprehend it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to show interest in crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses accept cryptocurrency as a method of payment, it will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul patience and discipline is essential.