It’s been a difficult experience for the crypto market in 2022. By November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill and down, the FTX crash turned them 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 experienced its fair share of dips over the years. And every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This will 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 scalability and security, the potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and how 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 market for crypto continues to mature as more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a means of payment, it makes it easier for customers to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long haul, being patient and disciplined will be key.