It’s been a rough ride for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. And just when things were going downhill after the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. And every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that at the end of every 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 typically followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in increasing participation in the market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive 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 cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and understand it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, 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, which are digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long-term Being patient and disciplined will be key.