It’s been a rough journey for the cryptocurrency market through 2022. In November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was looking down and down, the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Every time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high 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 better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. And this growing use case could result in more people getting involved in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based 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 result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase, it will become easier for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a means of payment, this will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re committed to the long run Being patient and disciplined will be key.