It’s been a rough journey for the cryptocurrency market through 2022. In November the market was down by 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash made them look 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 drops in the past. Each time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017 it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people learn about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about and understand it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for people to buy and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re in it for the long-term Being patient and disciplined is essential.