It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by 70% from its previous peak on November 20, 2021. When things were getting worse after the FTX crash turned them worse. 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. And every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. 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 are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more 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 companies are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation 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 even individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created using blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals 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.
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, it will make it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long haul, being patient and disciplined is crucial.