It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. And just when things were looking down, the FTX crash made them look more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in many ways. This growing demand can 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, many large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. As more and more people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing, more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, it makes it easier for consumers to use and hold crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long-term patience and discipline is essential.