It’s been a tough journey for the cryptocurrency market through 2022. By November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were looking down and down, the FTX crash turned things even 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 many dips in the past. Each time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually surpasses 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
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could result in more people being involved in the market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases 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 increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of 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 grows, more and more people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can drive up prices.
realm crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline is crucial.