It’s been a tough ride for the crypto market until 2022. In November the market had dropped by more than 70 percent from the previous high at the end of November. Just when the market was looking down, the FTX crash turned things more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Every time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market 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 acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase, it will become easier for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this will make it easier for people to use and hold cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long-term Being patient and disciplined is crucial.