It’s been a rough experience for the crypto market until 2022. By November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were looking down and down, the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Each time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then 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. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Government regulations
As the crypto market grows, governments around the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built upon blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase it will be more convenient for individuals to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long haul Being patient and disciplined will be key.