It’s been a difficult experience for the crypto market through 2022. In November the market was down by more than 70 percent from the previous high at the end of November. And just when things were going downhill after the FTX crash turned things even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through that 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, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries taking to it, its usage and acceptance is growing. From banking to gaming, crypto is being used in many ways. And this growing use case can lead to more people being involved in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a form of payment, it will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. With these things to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long haul patience and discipline is essential.