It’s been a tough experience for the crypto market in 2022. In November the market had dropped by 70 percent from the previous high on November 20, 2021. Just when the market was getting worse 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 had its fair share of drops in the past. Every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. In 2017, it broke the record and hit a record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. And 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 tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could result in more people being involved in the market which could increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. In the future, as more people become aware of cryptocurrency and investing 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 market for crypto is maturing as more and more people are starting to learn about and understand the concept. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services created using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase it will be easier for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a means of payment, it will make it easier for people to hold and use crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. For those committed to the long-term, being patient and disciplined is crucial.