It’s been a rough experience for the crypto market through 2022. As of November the market was down by 70% from its previous peak in November 2021. Just when the market was getting worse, 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 seen many dips over the years. Each time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new record 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 record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. This growing demand could result in more people being involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of people learn about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which can increase prices.
mmc crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to look at crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be easier for people to buy and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a form of payment, this will make it more convenient for consumers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long haul Being patient and disciplined is essential.