It’s been a tough experience for the crypto market through 2022. As of November the market was down by 70% from its previous peak at the end of November. When things were getting worse and down, the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record, and hit a new high of $19,600. In 2018, the price was at $3,100. In 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. In the future, as more everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a form of payment, this will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors in mind, 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 run Being patient and disciplined will be key.