It’s been a tough experience for the crypto market until 2022. By November the market was down by more than 70 percent from the previous high on November 20, 2021. When things were looking down, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Each time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven 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 in the past, dips are typically followed by a long bull run that eventually surpasses the resistance created by the previous high price. This is evident in more than 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 companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to more people getting involved in the market which could increase the price.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto grows 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.
A broader range of blockchain applications
The underlying technology behind 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 exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow it will be easier for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, it will make it more convenient for people to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long haul patience and discipline will be key.